COBELL v. NORTON

MEMORANDUM OPINION

("Historical Accounting")

LAMBERTH, District Judge.

Table of Contents

I.    Introduction ........................................................ 72
      A.   Factual Background ............................................. 72
           1. The Removal of the American Indians ......................... 72
           2. The Allotment Process ....................................... 74
           3. The Individual Indian Money (IIM Trust) ..................... 76
      B.   Procedural Background .......................................... 81
           1. The Filing of the Present Case .............................. 81

           2. The Phase I Trial ........................................... 82
           3. The Second Contempt Trial ................................... 83
           4. The Phase 1.5 Trial ......................................... 85

II.   An Overview of Institutional Reform Litigation ...................... 86
      A.   A Model of an Institutional Reform Case ........................ 87
      B.   Major Settings of Institutional Reform Litigation .............. 92
           1.   Schools ................................................... 92
           2.   Prisons ................................................... 95
           3.   Mental Health Facilities ................................. 100
           4.   Public Housing ........................................... 101
           5.   Other Settings ........................................... 104
      C.   Conclusion .................................................... 107

III.  Separation of Powers ............................................... 108
      A.   Introduction .................................................. 108
      B.   Judicial-Executive Separation of Powers Cases ................. 110
      C.   Analysis ...................................................... 118
      D.   The Role of the Courts in Trust Cases ......................... 127
           1.  Introduction .............................................. 127
           2.  American Trust Law ........................................ 127
      E.   Conclusion .................................................... 134

IV.   The Mandates of the D.C. Circuit ................................... 136
      A.   Cobell VI ..................................................... 136
      B.   Cobell VIII ................................................... 140
      C.   The Nature and Scope of the Court's Review .................... 141

V.    The Plans .......................................................... 147
      A.   An Overview of Interior's Accounting Plan ..................... 147
           1.  Introduction .............................................. 147
           2.  The Collection Process .................................... 148
               a.  Indexing of Trust Records ............................. 148
               b.  Collection of Missing Trust Records from Third Parties. 148
               c.  Compilation of Transaction Histories .................. 149
           3.  The Accounting Process .................................... 149
               a.  The Three Categories of Accounts ...................... 150
               b.  Verification of Transactions .......................... 151
           4.  The Reporting Process ..................................... 151
           5.  The Quality Control Process ............................... 151
               a.  Tests of the IIM Trust Systems ........................ 151
               b.  Other Quality Control Measures ........................ 151
      B.   Adequacies and Deficiencies of Interior's Accounting Plan ..... 152
           1.  The Collection Process .................................... 152
               a.  The Availability of Adequate Records .................. 152
               b.  Collection of Missing Trust Records from Third Parties. 155
               c.  Indexing of Trust Records and Compilation of Transaction
                   Histories ............................................. 161
           2.  The Accounting Process .................................... 166
               a.  Introduction .......................................... 166
               b.  Special Deposit Accounts (SDAs) ....................... 166
               c.  Judgment and Per Capita Accounts ...................... 168
               d.  Land-Based Accounts ................................... 169
                   (1) Proposed Termination Date of the Accounting ....... 169
                   (2) Proposed Start Date of the Accounting ............. 172
                   (3) Deceased Beneficiaries ............................ 173
                   (4) Assets ............................................ 175
                   (5) Direct Pay ........................................ 177
                   (6) Contract/Compact/Cooperative Agreement ............ 180

                   (7) Land Escheatment .................................. 181
               e.  Method of Verification ................................ 183
                   (1) Accounting Standards Manual ....................... 184
                   (2) Statistical Sampling .............................. 187
           3.  The Reporting Process ..................................... 198
           4.  The Quality Control Process ............................... 200
               a.  System Tests .......................................... 200
               b.  Other Quality Control Measures ........................ 204
      C. Plaintiffs' Accounting Plan ..................................... 207

VI.   Relief to Be Ordered ............................................... 211
      A.   The Four-Part Test ............................................ 211
           1.  Substantial Likelihood of Prevailing on the Merits ........ 211
           2.  Irreparable Injury ........................................ 212
           3.  Balance of Hardships ...................................... 212
           4.  Furtherance of the Public Interest ........................ 212
      B.   Structural Injunction ......................................... 213
      C.   Appointment of a Monitor ...................................... 214
      D.   Timetable ..................................................... 220
      E.   Retention of Jurisdiction ..................................... 224

VII.   Conclusion ........................................................ 224

This matter comes before the Court after a forty-four day bench trial. Having undertaken a careful review of all the evidence presented and all representations made during that trial, of the record in this case, and of the applicable law, the Court now enters a structural injunction and appoints a monitor to oversee its implementation.

This memorandum opinion is the first of two opinions issued this date. The present opinion deals solely with the further relief ordered by this Court relating to the historical accounting owed by defendants to plaintiffs. The second opinion will treat the further relief ordered by the Court relating to the obligation of the Interior defendants to bring themselves into compliance with the fiduciary duties owed to plaintiffs as the trustee-delegate of the United States for the individual Indian money trust.

A decent respect for all who will be affected by today's rulings makes it appropriate that the Court should provide a full explanation of the reasons compelling it to order such relief. Only an appreciation of the full context in which the present trial emerged will make clear precisely why this Court has determined such relief to be necessary. Part I of this opinion provides a synopsis of this litigation to date. Part II examines the tradition of institutional reform cases, and explains how the present case fits within that tradition. Part III analyzes relevant separation-of-powers issues. Parts IV and V present in detail the Court's specific findings of fact and conclusions of law. Part VI describes the relief ordered this date. Finally, in Part VII, the Court provides a brief explanation of the profound necessity for the entry of a structural injunction in this matter.

I. INTRODUCTION1

A. Factual Background

1. The Removal of the American Indians

The forced removal of American indigenous peoples from their ancestral lands is one of the darkest chapters in American history. Perhaps few today realize, however, that this forced removal did not result from isolated acts of Western settlers; rather, it was set in motion by the federal government. Moreover, few recall the clash between the executive branch and the federal judiciary over the policy of removal, in which the executive branch refused to enforce the mandate of the Supreme Court that American Indian Tribes were to be treated as sovereign entities.

In 1827, the Cherokee nation, located within the boundaries of the state of Georgia, adopted a written constitution modeled after the U.S. Constitution, which declared them to be a sovereign, autonomous nation. VINE DELORIA, JR. & CLIFFORD M. LYTLE, AMERICAN INDIANS, AMERICAN JUSTICE 28 (1983) ("American Indians"). At the time, the Cherokee nation possessed "a thriving agricultural economy, a written language, and a formal government, including a legislature, and courts." DAVID H. GETCHES ET AL., FEDERAL INDIAN LAW 96 (4th ed. 1998) ("Federal Indian Law"). The following year, the state of Georgia passed a law assimilating Cherokee lands into Georgia's northwestern counties. In 1829, the state passed a law rendering the Cherokee territory located within Georgia boundaries subject to the laws of Georgia, effectively abolishing existing Cherokee laws and customs. The Cherokee nation filed suit in federal court to enjoin the enforcement of the Georgia laws, but the matter was dismissed for lack of jurisdiction. Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 8 L.Ed. 25 (1831). A year after dismissing the case, however, the Supreme Court, in an opinion authored by Chief Justice John Marshall, determined the Cherokee nation to be "a distinct community, occupying its own territory, . . . in which the laws of Georgia can have no force, and which the citizens of Georgia have no right to enter, but with the assent of the Cherokees themselves...." Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 561, 8 L.Ed. 483 (1832).

Prior to the Court's decision, however, Congress had passed the Indian Removal Act, authorizing the President to compel Indian Tribes living east of the Mississippi River to migrate westward. Additionally, in 1830, the governor of Georgia had announced that gold had been discovered on the Cherokee lands, prompting widespread trespasses onto Cherokee territory by Georgia citizens searching for gold. Therefore, the governor of Georgia, together with numerous state officials, announced that they would not obey the mandate of the Supreme Court. Federal Indian Law at 122. Moreover, upon learning of the Worcester decision, President Andrew Jackson is fabled to have retorted: "Well, John Marshall has made his decision—now let him enforce it." When they realized that the executive branch had no intention of honoring the decision of the Court, the Cherokee nation reluctantly entered into the Treaty of New Echota in 1835. American Indians at 33. Soon afterward, "[n]early sixteen thousand Cherokees walked `silent and resigned' from Georgia to their new homes in what became eastern Oklahoma. This journey has been called the `Trail of Tears' because the Indians were leaving their ancestral lands under the most harsh conditions imaginable." Id. at 7.

The other Tribes dwelling east of the Mississippi River, having witnessed the fate of the Cherokee nation, realized that their removal to the West was inevitable, and entered into treaties with the United States promising to migrate westward. They included the remaining four "Civilized Tribes," the Choctaw, Chickasaw, Creek, and Seminole; and other Tribes, including the Kickapoo, Wyandot, Ottawa, Pottawatomie, Winnebago, Sac and Fox, Delaware, Shawnee, Wea, Peoria, Miami, Kaskaskia, and Piankeshaw. American Indians at 32; Federal Indian Law at 126-27.

2. The Allotment Process

As America expanded westward, its citizens re-encountered the Tribes that it had banished to reservations located west of the Mississippi River. Instead of forcing the Tribes to migrate further westward, however, the United States gradually adopted a new policy to deal with "the Indian problem": the Tribes would simply be assimilated into American culture. Speaking before Congress in 1881, President Chester Arthur declared that the new policy of the United States towards the Indian Tribes would be "to introduce among the Indians the customs and pursuits of civilized life and gradually to absorb them into the mass of our citizens." American Indians at 8. The primary method by which this policy would be executed was the allotment process.2

In 1887, Congress passed the General Allotment Act, 24 Stat. 388. It became popularly known as the Dawes Act, after one of its sponsors, Massachusetts Senator Henry Dawes. The Dawes Act authorized the President to divide any Indian reservation into separate plots, and assign the portions to individual tribal members, according to a prescribed formula. The head of a family was allotted a one-fourth section, or 160 acres; each single person over eighteen and each orphan child under eighteen was allotted a one-eighth section, or 80 acres; and each non-orphan child under eighteen was allotted a one-sixteenth section, or 40 acres. Any "surplus" lands that were not allotted to individual Indians were opened to settlement by non-Indians. See Cobell v. Babbitt, 91 F.Supp.2d 1, 8 (D.D.C.1999) ("Cobell V"). Section 5 of the Dawes Act provided that "the United States ... will hold the land thus allotted, for the period of twenty-five years, in trust for the sole use and benefit of the Indian to whom such allotment shall have been made, or, in case of his decease, of his heirs" and that after twenty-five years had passed, the United States would convey full title to the land to the Indian to whom the land had been allotted. The United States was authorized to extend the twenty-five year period, in its discretion. As the D.C. Circuit has previously explained, "[d]uring the trust period, individual accounts were to be set up for each Indian with a stake in the allotted lands, and the lands would be managed for the benefit of the individual allottees. Indians could not sell, lease, or otherwise burden their allotted lands without government approval. Where tribes resisted allotment, it could be imposed." Cobell VI, 240 F.3d at 1087 (citation omitted).

One pair of commentators has stated that a key assumption of the government's allotment policy was that "Indians wanted to become farmers and had the capacity to do so. This policy assumed that the routine work of agriculture would provide the necessary training in thrifty habits that all `civilized' people possessed." American Indians at 9-10. As one of the individual defendants testified during the first trial in this litigation,

Cobell V, 91 F.Supp.2d at 8. In short, to quote Theodore Roosevelt, the Dawes Act was designed to be "a mighty pulverizing engine to break up the tribal mass."

By the early twentieth century, it had become evident that, as judged by its own terms, the allotment process had been an abysmal failure. It had failed to remake the American Indians in the image of the white man, and to absorb the Indian Tribes within American society. To the contrary, "[r]eservations in the early twentieth century were still `Indian country'— places where a `measured separatism' had been maintained between Indians and the dominant society." Federal Indian Law at 191. A comprehensive report issued by Lewis Meriam in 1928 entitled "The Problem of Indian Administration" (commonly known as the Meriam Report) concluded that the assumptions underlying the allotment process had been flawed: "It almost seems as if the government assumed that some magic in individual ownership of property would in itself prove an educational civilizing factor, but unfortunately this policy has for the most part operated in the opposite direction" (quoted in American Indians at 13).3

Influenced by the findings in the Meriam Report, Congress in 1934 passed the Indian Reorganization Act, 48 Stat. 984 ("IRA"). Section 1 of the IRA ended the practice of allotting Indian lands. Section 2, however, provided that "[t]he existing periods of trust placed upon any Indian lands and any restriction on alienation thereof are hereby extended and continued until otherwise directed by Congress." In other words, any reservation lands that had already been allotted before 1934, but for which full title had not been conveyed to the Indians to whom they had been allotted, were to be held in trust by the United States indefinitely. As such, the United States continues to possess a duty to administer allotted Indian lands in trust for the benefit of the individual Indians to whom they were allotted. The income arising from the administration of those lands held in trust by the United States is the subject of the present suit.

3. The Individual Indian Money (IIM) Trust

As a result of the allotment process that took place between 1887-1934, followed by the IRA's indefinite extension of the trust period, the United States presently holds approximately 11 million acres of land in trust for the heirs of the American Indians to whom they were originally allotted.

The United States itself is the trustee of this trust, which is known as the Individual Indian Money (IIM) trust. However, Congress has designated the Secretary of the Interior and the Secretary of the Treasury to be the trustee-delegates of the United States, and the departments run by these two cabinet secretaries are entrusted with certain trust management responsibilities. The trust responsibilities of the Treasury Department are to maintain and invest IIM funds, under the direction of the Interior Department, and to provide accounting and financial management services. The United States has entrusted most of its trust obligations, however, to the Department of the Interior. Within the Interior Department, several agencies perform particular IIM trust functions. These agencies include the Bureau of Indian Affairs (BIA), the Bureau of Land Management (BLM), the Office of Trust Funds Management (OTFM), and the Minerals Management Service (MMS). In testimony received during the most recent trial, Interior Deputy Associate Secretary James Cason estimated that since 1909, approximately $13 billion has been received and deposited into the IIM trust.4

A 1994 Report of the House Committee on Natural Resources provides a useful overview of the IIM trust management system:

H.R. REP. NO. 103-778, at 9 (1994), reprinted in 1994 U.S.C.C.A.N. 3467, 3468. This committee report also discusses the long history of mismanagement of the IIM trust:

Id. at 9-10; 1994 U.S.C.C.A.N. at 3468-69. The 1992 report alluded to, entitled Misplaced Trust, "concluded that Interior had made no credible effort to address the problems in trust administration in a `wide range of areas' and that Interior had disobeyed many congressional directives aimed at forcing Interior to correct trust management practices and reconcile the Indian trust accounts." Cobell V, 91 F.Supp.2d at 12.

Prompted in large part by the findings of the Misplaced Trust report, Congress in 1994 enacted the Indian Trust Fund Management Reform Act, Pub.L. No. 103-412, 108 Stat. 4239 ("the 1994 Act"). It will be useful to examine the legislative history of the act, in order to glean the intent of Congress in passing it.

The bill was introduced in the House by Congressman Bill Richardson (D-N.M.) as H.R. 4833. On September 26, 1994, then-Congressman Craig Thomas (R-Wyo.) explained to the House Subcommittee on Environment, Energy, and Natural Resources the need for passage of such a bill:

140 CONG. REC. 27,243 (1994) (emphasis in original). The bill was reported favorably to the full House on September 28, 1994. Five days later, Congressman Mike Synar (D-Okla.) addressed the full House:

40 CONG. REC. 27,243—24,244 (1994) (emphasis added). The statements by the bill's sponsors demonstrate that the bill was not intended as a mild suggestion to the Interior Department to undertake minor changes. Instead, it was a bill presented by congressmen who had become exasperated by the Interior Department's repeated refusal to reform its management of the IIM trust, and who intended for the bill to implement sweeping, radical changes in the management of the trust. During a Senate hearing on the management of the IIM trust, Senator Daniel Inouye (D-Haw.) observed that "[t]he management of the Indian trust fund has been grossly inadequate in many respects .... Financial management of the trust has been neglected for decades. Many believe that the crisis which exists in the management of the trust funds can only be cured by dramatic change." 139 CONG. REC. 9586 (1993). The House Report on H.R. 4833 speaks to the broad scope of the changes intended to be set in motion by the bill:

H.R. REP. NO. 103-778, at 10 (1994), reprinted in 1994 U.S.C.C.A.N. 3467, 3469.

This intent is nowhere more clearly demonstrated than in the statements of Congressmen Richardson and Synar regarding H.R. 4833's immediate predecessor during an oversight hearing on trust fund management:

Oversight Hearing Before the Subcomm. on Native American Affairs of the Comm. on Natural Resources on Bureau of Indian Affairs' Management of Trust Funds; and H.R. 1846, 103d Cong. 36-37 (Sept. 27, 1993). In other words, a full year before they sponsored H.R. 4833, these two congressmen were giving serious consideration to privatizing the management of the IIM trust if fundamental reforms were not immediately implemented. During a later oversight hearing on H.R. 4833, Congressman Thomas described the Interior Department as "the most pathetic excuse for government that we now have on the Federal level from top to bottom." Hearing Before the Subcomm. on Native American Affairs of the Comm. on Natural Resources on H.R. 1846 and 4833, 103d Cong. 64 (Aug. 11, 1994). During the same hearing, Congressman Richardson, the primary sponsor of H.R. 4833, declared:

Id. at 2.

H.R. 4833 was passed by the Congress and signed into law on October 25, 1994 as Public Law 103-412.

B. Procedural Background

1. The Filing of the Present Case

On June 10, 1996, the named plaintiffs commenced the present action against the Secretary of the Interior and other federal officials, alleging that the mismanagement of the IIM trust by the Interior and Treasury departments constituted a breach of their fiduciary duty to plaintiffs. This Court certified the action as a class action on February 4, 1997, and designated the named plaintiffs as class representatives for all present and former IIM beneficiaries. Cobell I, 30 F.Supp.2d at 28. On May 5, 1998, the Court bifurcated this action into two distinct phases. Phase I of the litigation, also known as the "fixing the system" phase, focuses on the reforms instigated by defendants to bring the management of the IIM trust into compliance with their fiduciary obligations. This phase is forward-looking, in that it attempts to discern whether defendants have reformed the management of the IIM trust in such a way as to ensure that the United States will honor its fiduciary obligations to the Indian beneficiaries in the future. Phase II, also known as the "historical accounting phase," focuses on the performance of a formal accounting of the IIM trust, as required by the 1994 Act. This phase is backward-looking, in that it attempts to discern whether and to what extent the United States has honored its fiduciary obligations to the Indian beneficiaries from the inception of the trust until the present date.

On February 22, 1999, following a two-week bench trial, the Court found Bruce Babbitt, then-Secretary of the Interior, Robert Rubin, then-Secretary of the Treasury, and Kevin Gover, then-Assistant Secretary of Interior for Indian Affairs, to be in civil contempt for violating two of the Court's discovery orders. Cobell v. Babbitt, 37 F.Supp.2d 6, 9 (D.D.C.1999) ("Cobell II"). In its conclusion, the Court explained why the extreme step of imposing a contempt sanction was necessary:

Id. at 38. The Court directed the defendants to compensate plaintiffs for the harm suffered, and appointed a special master in this litigation. It also instructed the defendants: "Should it appear at any point that the defendants are not taking all reasonable steps to comply with the orders of this court, then harsher relief will be duly administered." Id.

2. The Phase I Trial

In 1999, the Court conducted a six-week bench trial addressing plaintiffs' Phase I claims. On December 21, 1999, the Court issued a memorandum opinion containing detailed factual findings and conclusions of law. Cobell v. Babbitt, 91 F.Supp.2d 1 (D.D.C.1999) ("Cobell V"). The Court also issued a declaratory judgment:

Id. at 58. The Court retained jurisdiction over the case for a period of five years, subject to enlargement, and ordered defendants to file quarterly status reports with the Court "setting forth and explaining the steps that defendants have taken to rectify the breaches of trust declared today and to bring themselves into compliance with their statutory trust duties." Id. at 59. It denied plaintiffs' request for further prospective relief, explaining:

Id. Defendants appealed from this decision, arguing (1) that they possessed no judicially-enforceable duty to account, (2) that reform of the IIM trust had neither been unlawfully withheld nor unreasonably delayed, (3) that this Court lacked sufficient basis to award equitable relief and (4) that the relief awarded was unwarranted. Cobell VI, 240 F.3d at 1094. The D.C. Circuit affirmed, in large part, and remanded to this Court for further proceedings. Id. at 1110.5 Because the scope of this Court's jurisdiction on remand remains a contested issue, the Court will analyze Cobell VI at greater length later in this opinion.

3. The Second Contempt Trial

On September 17, 2002, following a twenty-nine day bench trial, this Court issued a memorandum opinion. The opinion found Interior Secretary Gale Norton and Assistant Interior Secretary of Indian Affairs Neal McCaleb to be in civil contempt of court, in their official capacities, with respect to five specifications:

Cobell VII, 226 F.Supp.2d at 161. The opinion also explained the necessity for considering further injunctive relief, beyond that imposed at the end of the Phase I trial:

Id. at 147-48 (internal citations and quotation marks omitted).

In light of its conclusion to consider further injunctive relief, the Court scheduled further proceedings to determine whether such additional relief was warranted and, if so, to determine the nature and extent of such relief. Because the Court had already conducted a Phase I trial, and because the time was not ripe to conduct a hearing on Phase II of the litigation, the Court designated these proceedings "the Phase 1.5 Trial," to stress their nature as an interim stage of this litigation. It explained that this trial would "encompass additional remedies with respect to the fixing the system portion of this case and approving an approach to conducting a historical accounting of the IIM trust accounts." Id. at 162. Specifically, the Court explained that it planned to enter a structural injunction in this case. Id. at 147 n. 154.

The Court directed the Interior defendants to submit two plans to the Court: (1) a plan for conducting a historical accounting of the IIM trust accounts, and (2) a plan for bringing themselves into compliance with the fiduciary obligations owed to the IIM trust beneficiaries. It stressed that these plans should "describe, in detail, the standards by which they intend to administer the IIM trust accounts, and how their proposed actions would bring them into compliance with those standards." Id. at 148-49. The Court also granted the Treasury Department and plaintiffs leave to file any plan or plans of their own regarding these matters. On January 6, 2003, the Interior defendants and plaintiffs each submitted two plans to this Court.7

On July 18, 2003, the D.C. Circuit vacated the order of this Court finding defendants Norton and McCaleb to be in civil contempt of court, and directing these defendants to bear the cost of the expenses and fees incurred by plaintiffs in litigating the second contempt trial. Cobell v. Norton, 334 F.3d 1128, 1150 (D.C.Cir.2003) ("Cobell VIII"). Because the D.C. Circuit did not set aside the findings of fact made in this Court's September 17, 2002 memorandum opinion, the Court will treat those factual findings as having been established. See Fed.R.Civ.P. 52(a) ("Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.")

4. The Phase 1.5 Trial

The Phase 1.5 Trial began on May 1, 2003 and ended on July 8, 2003. The Court heard forty-four days of testimony and received over 500 exhibits into evidence from both parties. Proposed findings of fact and conclusions of law were submitted by both parties on August 4, 2003. The Court has weighed all of the evidence presented and fully reviewed the arguments presented by the parties, and hereby enters these findings of fact and conclusions of law.

The Court must first confront the threshold issue of whether it possesses the remedial authority to enter structural injunctive relief against the Interior Department. In no uncertain terms, the Interior defendants have recently made clear that "their position on [this issue] remains that it is beyond this Court's jurisdiction to enter a structural injunction that dictates how the Interior Defendants must conduct trust reform or comply with their obligation to account to individual Indian money (IIM) account holders." Resp. to Court's Inquiries During Closing Arguments at 1. Additionally, the Interior defendants "do not consent to a structural injunction of any sort, to another court monitor, or to any sort of board or other entity to perform a monitoring role." Id. at 2.

Because the purpose of the Phase 1.5 trial was to determine whether additional relief, including structural injunctive relief, was warranted in this litigation, and because the Interior defendants have contested the remedial authority of the Court to afford such relief, the Court must analyze carefully the issue of whether it possesses the remedial authority to enter a structural injunction against the Interior Department. Part II of this opinion will therefore examine this litigation within its proper procedural context, namely, the long line of institutional reform cases in the federal courts. The focus of this examination will be upon the remedial measures undertaken in such cases, as well as the limitations that have been placed upon the authority of the federal courts to order such measures. Part III of this opinion will analyze other factors potentially affecting the Court's ability to enter structural injunctive relief. Specifically, the Court will examine the separation-of-powers principle, the mandates of the D.C. Circuit in its two opinions in this litigation, and the remedial authority afforded to equity courts in trust litigation. After careful consideration of each of these factors, the Court will determine the nature and extent of its remedial authority in this litigation.

II. INSTITUTIONAL REFORM LITIGATION

As noted above, Interior asserts that this Court lacks jurisdiction to enter a structural injunction in the present case. To the Court's knowledge, this precise issue has never been submitted for adjudication by a federal court. For guidance on this issue, it will be necessary to look to cases in which such injunctions have been frequently issued — namely, the separate lines of substantive cases that collectively form the body of institutional reform litigation in the federal courts.

At least two observations may be made upon surveying the different forms that such litigation has taken. The first is that structural injunctions have been issued (or consent decrees have been entered into) against federal governmental entities in a number of different contexts. The second is that in recent years, the Supreme Court has laid down a number of precedents governing the nature and scope of relief that may be issued in institutional reform cases. It hardly warrants mentioning that, in an institutional reform case such as the present action, the Court must look to binding precedent of the Supreme Court to guide its hand. An examination of the different lines of cases that form the body of institutional reform litigation will allow the Court to examine these important precedents in the substantive context in which they emerged.

The scholarly literature on institutional reform litigation, both positive8 and negative,9 is vast, and the Court will not attempt to discuss it here. Instead, the Court will confine itself to explaining the typical manner in which such cases develop over time, and summarizing the most prominent substantive areas that have formed the subject of institutional reform cases.

A. A Model of an Institutional Reform Case

The necessity of institutional reform litigation arises from the problem of government monopoly. In the modern regulatory state, services provided by many institutions (such as schools, foster care facilities, mental health facilities, prisons, and low-cost housing) are provided exclusively or almost exclusively by government entities. The nature of these services is determined by the legislative branch of government, and administered and managed by bureaucracies within the executive branch. A large number of persons may be dependent in some way upon the services provided and administered by these branches. Therefore, if these branches fail to administer these services in conformity with the Constitution or with applicable statutes, the recipients of these services may suffer injury. However, because the government possesses a monopoly or near-monopoly on the provision of these services, it is impossible for the recipients to respond by "voting with their feet." That is, if the government dispenses a service that is inadequate because it does not conform to constitutional or statutory standards, the recipients may not simply go to a competitor to receive similar services. The monopoly or near-monopoly possessed by the government thus prevents market forces from establishing the most efficient allocation of the services provided.10

Nor does the power of the vote necessarily furnish an adequate check on these branches to ensure that they comply with constitutional and statutory requirements. For one, the recipients of the services may be disenfranchised—e.g., under the age of eighteen, imprisoned, or committed to the treatment of a mental health facility. Even if the recipients are not disenfranchised, the managers and administrators of such services might well be unresponsive to the voting power. Typically, the types of services in question are not managed directly by elected officials, but by a vast bureaucracy headed by an official who does not run for election. For example, the public does not elect a secretary of housing, an education commissioner, or a director of prisons—it elects a mayor, governor, or president who appoints these officials, who in turn administer the bureaucracy that provides these services.

In short, if a government entity administers services in a manner that violates either the Constitution or applicable statutes, neither market forces nor the power of the vote can be relied upon to restore its compliance with the law. However, if the recipients of these services suffer injury caused by the violations of law, they may seek redress for their injury in court. This type of litigation is typically known as "institutional reform litigation" because it is initiated in order to reform a government institution by bringing it into compliance with the Constitution or other governing law. The two defining characteristics of an institutional reform case are (1) the case is founded upon a claim that the statutory or constitutional rights of a class of plaintiffs have been violated by an ongoing governmental practice, and (2) the class of plaintiffs seeks to have the trial court assume an continuing role in monitoring and enforcing structural change within the government entity. One author has presented a useful model of the manner in which such cases often develop and are resolved, dividing them into four key phases:

PHILIP J. COOPER, HARD JUDICIAL CHOICES 16 (1988) ("Hard Judicial Choices").

The trigger phase is described by Cooper as follows: "In general, the equitable remedy cases are instituted as a reaction to a combination of historic policies or practices plus some triggering event. The cases tend to arise in situations where a number of controversial actions have been taken by one or more government units over time until a trigger level is reached." Id. at 17. The action is initiated in the trigger phase, and may be dismissed for a number of reasons, e.g., lack of standing. If the action is not dismissed during this initial phase, it proceeds to the liability phase, "the purpose of which is to determine whether there has been a violation of law justifying some sort of remedy and, if so, what is the extent of the injury suffered by the plaintiffs?" Id. at 18.

If the trial court finds the defendant to be liable, the remedy phase begins. Cooper's description of this phase of institutional reform litigation warrants quotation at some length:

Id. at 19.11

If the court ratifies a negotiated agreement submitted by the parties, the agreement is known as a "consent decree." If, however, the parties fail to agree, the usual step for the court to take is to issue a "structural injunction." This term was originated by Professor Owen Fiss, who defined it as an "injunction seeking to effect the reform of a social institution." OWEN M. FISS, THE CIVIL RIGHTS INJUNCTION 9 (1978); see also Lampkin v. District of Columbia, 886 F.Supp. 56, 62 (D.D.C. 1995) ("The purpose of a structural injunction is to remodel an existing social or political institution to bring it into conformity with constitutional demands; e.g., restructuring a school system to facilitate equal educational opportunities. Structural injunctions are typically used as public law remedies for serious and pervasive rights violations."). In its second contempt opinion, this Court explained that "[s]tructural injunctions are somewhat different than ordinary injunctions, `in that their goal is not merely to halt a single wrongful practice, but to halt a group of wrongful practices by restructuring a social institution such as a mental hospital, school, or prison.'" Cobell VII, 226 F.Supp.2d at 146 n. 154 (quoting DAN B. DOBBS, LAW OF REMEDIES § 7.4(4) (2d ed.1993)). As noted by Cooper, in choosing the form that a structural injunction should take,

Hard Judicial Choices at 20-21 (footnote omitted). A forthcoming article observes that the prevalent trend in the federal courts is to favor what Cooper labels "performance standards" over specified remedial actions. See Charles F. Sabel & William H. Simon, Destabilization Rights: How New Public Law Litigation Succeeds (forthcoming in Harvard Law Review).

Another group of authors has divided the provisions of a typical structural injunction into substantive and administrative components. Substantive components consist of "the actions ordered by the court to remove illegal conditions." Special Project at 814. Administrative components, on the other hand, represent "the means adopted to effect the substantive measures ordered. These means are not themselves required to remedy the wrong; their justification is to be found in the powers of a court of equity to take necessary measures in aid of its decree, not in the constitutional or statutory principles upon which the substantive aspects of the decree are based." Id. The administrative components of a structural injunction may include the appointment of court officials to administer the remedy, including masters, monitors, or mediators. Id. at 826-30.

The final stage in Cooper's model of an institutional reform case is the post-decree phase. This phase

Hard Judicial Choices at 23-24. If the institutional defendant refuses to comply with the structural injunction, the court possesses a variety of alternatives to enforce the decree. It may threaten the defendant with a contempt finding, or hold the defendant in contempt. Special Project at 838-39. The court may "tighten" the substantive provisions of the injunction, for example, making the provisions more specific. Id. at 841. Finally, if faced with repeated noncompliance, the court may select more intrusive means to administer the injunction. For example, it may appoint an administrator to supplement the management of the institutional defendant. Id. at 831-35, 841. If none of these measures suffice to effectuate compliance with the injunction, the court must consider resorting to the "most intrusive and coercive of administrative techniques," namely, the appointment of a temporary or permanent receiver. Id. at 835-37.12

Of course, if the institutional defendant chooses to cooperate with the structural injunction, the trial court may take measures to ease the administrative burden upon the defendant. For example, it may decide to "loosen" the substantive provisions of the injunction, affording the defendant a broader degree of discretion in determining the means to satisfy the provisions. Or the court may reduce the oversight role of court-appointed officials such as masters and monitors. Finally, upon a demonstration that the defendant has remedied the situation that gave rise to the suit, the court will typically terminate its retention of jurisdiction over the case.

This model nicely corresponds with the present litigation. The present class action was brought to enforce the Interior and Treasury Department's compliance with the provisions of the 1994 Act and with the pre-existing fiduciary duties imposed upon these agencies in their capacities as trustee-delegates of the United States. As noted above, in passing the 1994 Act, Congress intended to effect broad, sweeping reforms within Interior. The passage of the 1994 Act constituted the triggering event that led to the initiation of the present case. Having survived dismissal motions filed by defendants, the case proceeded to the liability phase, which ended with the D.C. Circuit's affirming of this Court's 1999 liability opinion. The remedy phase began in 2001, when the D.C. Circuit issued its opinion, affirming this Court's remand of the matter to Interior and Treasury. This Court's September 17, 2002 memorandum opinion initiated a new development within the remedy phase, namely, the Phase 1.5 litigation, which was held "to determine what additional relief is warranted in this matter." Cobell VII, 226 F.Supp.2d at 148. During the Phase 1.5 trial, "proposals made by the defendants and counterproposals submitted by the plaintiffs [were] presented and explained" and "[t]estimony [was] taken to determine the appropriateness and feasibility of the plans." In the present opinion, the Court must determine whether the issuance of a structural injunction is appropriate, and if so, what form such an injunction should take.

B. Major Settings of Institutional Reform Litigation

In making this determination, it will be useful to provide a brief description of each of the major settings in which institutional reform litigation has taken place: (1) schools, (2) prisons, (3) mental health facilities, and (4) public housing. The Court will also examine some of the lesser-known contexts in which institutional reform litigation has taken place, including employment discrimination and hearings on Social Security benefits.

1. Schools

Institutional reform litigation began with school desegregation cases. After the Supreme Court issued its landmark decision in Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954) ("Brown I"), it remanded the combined cases to the district courts, instructing them to "enter such orders and decrees consistent with this opinion as are necessary and proper to admit to public schools on a racially nondiscriminatory basis with all deliberate speed the parties to these cases." Brown v. Board of Education, 349 U.S. 294, 301, 75 S.Ct. 753, 99 L.Ed. 1083 (1955) ("Brown II"). The Court explained that the district courts were to "consider the adequacy of any plans the defendants may propose to meet these problems and to effectuate a transition to a racially nondiscriminatory school system. During this period of transition, the courts will retain jurisdiction of these cases." Brown II, 349 U.S. at 301, 75 S.Ct. 753. Brown thus initiated several of the key elements of institutional reform litigation—the separation of the litigation into a liability phase (culminating with Brown I) and a remedy phase (commenced by Brown II); the submission of plans by the institutional defendant; and the retention of jurisdiction by district courts during the remedy phase.

As is well known, efforts by the federal district courts to desegregate primary and secondary schools were met with massive resistance in the southern states. The Supreme Court's mounting frustration with the recalcitrance of the southern school systems was expressed in its decision in Swann v. Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1, 91 S.Ct. 1267, 28 L.Ed.2d 554 (1971), in which the Court declared that

Id. at 15, 91 S.Ct. 1267 (citations and internal quotation marks omitted).

The vast majority of the resulting desegregation cases involved state and local governmental entities as defendants. However, Adams v. Richardson, 356 F.Supp. 92 (D.D.C.1973), involved a Title VI action against the U.S. Department of Health, Education, and Welfare (HEW). In Adams, the district court issued a declaratory judgment that, in violation of Title VI of the Civil Rights Act of 1964, HEW had continued to advance substantial federal funds to a number of state and local educational systems, despite the fact that the states or municipalities had either submitted unacceptable desegregation plans, failed to submit any plan for desegregation, or were otherwise failing to comply with Title VI. The court also concluded that, having learned that the states and municipalities were operating in violation of Title VI, HEW had violated its duty to commence enforcement proceedings against them in a timely manner. Having made these conclusions of law, the district court issued a structural injunction against HEW, directing the agency to

Adams v. Richardson, 480 F.2d 1159, 1161 (D.C.Cir.1973) ("Adams I") (internal citation and footnote omitted).

On appeal, similar to the defendants in the present case, HEW argued that the enforcement of Title VI was committed entirely to the discretion of the agency. The D.C. Circuit rejected this argument and affirmed the issuance of the structural injunction, although it directed the district court to modify the provisions relating to desegregation in higher education. Adams I, 480 F.2d at 1164-65. It also rejected HEW's argument that the imposition of a duty to monitor school districts to ensure compliance with Title VI lacked a basis in law:

Id. at 1165.

Two years later, the district court determined that HEW had demonstrated a "reluctance in recent years to use the administrative sanction process where school district[s] are known to be in non-compliance." Adams v. Weinberger, 391 F.Supp. 269, 271 (D.D.C.1975). It entered further injunctive relief against HEW, directing it to (1) require 125 school districts with one or more schools substantially disproportionate in their racial composition to rebut or explain the disproportion; (2) commence enforcement proceedings against 45 school districts that had failed to comply with Title VI; (3) report any findings of violations or presumptive violations of desegregation orders to the district courts that had issued the orders; (4) administer future enforcement activities in accordance with a schedule outlined by the court; and (5) report to the court all steps taken to comply with these orders. Id. at 271-73. Two years after it had issued this relief, the district court determined that HEW was continuing to provide federal aid to higher education systems in six states that had not achieved desegregation or submitted acceptable desegregation plans. Adams v. Califano, 430 F.Supp. 118, 120 (D.D.C.1977). It therefore supplemented the injunctive relief already granted by directing HEW to submit criteria for an acceptable desegregation plan to the six states within ninety days, to require each state to submit a revised desegregation plan within sixty days thereafter, and to render a determination on each plan within 120 days thereafter. Id. at 121.

In the 1990s, the Supreme Court supplemented the broad standards set forth in Brown II and Swann with appropriate limits on the remedial power of the courts to achieve desegregation. In Missouri v. Jenkins, 515 U.S. 70, 115 S.Ct. 2038, 132 L.Ed.2d 63 (1995), the Court reversed a remedial order of a district court that had "set out on a program to create a school district that was equal to or superior to the surrounding [suburban school districts]" through the creation of a "magnet school" program in the inner city to attract students from surrounding districts. Id. at 91, 115 S.Ct. 2038. The Court explained that

Id. at 99, 100, 115 S.Ct. 2038. Although many commentators at the time considered Jenkins and similar cases to have sounded the death knell of school desegregation suits, their fears were misplaced. For while many district courts have terminated their jurisdiction over school desegregation cases, a recent empirical study has determined that "the vast majority of school desegregation litigation continues, with no hint of impending termination." Wendy Parker, The Future of School Desegregation, 94 NW. U.L. REV. 1157, 1159 (2000).13 The article also observes that "[c]ontrary to the popular idea of judges acting as `super school boards' or `local superintendents,' judges have taken a remarkably minor, passive role in overseeing the implementation of remedial decrees." Id. at 1160.

2. Prisons

Prior to the 1960s, federal judges generally adopted a "hands-off" approach to prison conditions and the institutional rules to which federal and state inmates were subjected, refusing to entertain civil claims arising from such conditions or rules. See Margo Schlanger, Beyond the Hero Judge: Institutional Reform Litigation as Litigation, 97 MICH. L. REV.1994, 2000 (1999) ("Beyond the Hero Judge").14 That approach changed with the initiation of a civil suit in 1969 alleging that conditions in Arkansas state prisons violated the Eighth Amendment's prohibition of cruel and unusual punishment. The Supreme Court later described the conditions in Arkansas prisons at the time the action was filed:

Hutto v. Finney, 437 U.S. 678, 681-83, 98 S.Ct. 2565, 57 L.Ed.2d 522 (1978) (citations omitted). The Arkansas litigation "augured a nationwide flood of class-action lawsuits leading to major court orders requiring reform in such areas as housing conditions, security, medical care, mental health care, sanitation, nutrition, and exercise." Beyond the Hero Judge at 2004. Apart from the Arkansas litigation, the best-known prison reform case is the long-running Ruiz litigation, which was cited by the D.C. Circuit in its 2003 opinion in the present case. See Cobell VIII, 334 F.3d at 1142-43.20

Not all prison conditions cases involved conditions as deplorable as those in the Arkansas litigation. Moreover, although most prison conditions cases involved state jail or prison facilities, the federal prison system has been the subject of at least three such cases. In Jordan v. Arnold, 408 F.Supp. 869 (M.D.Pa.1976), inmates in the U.S. Penitentiary in Lewisburg, Pennsylvania filed a class action, claiming that the conditions in the prison's administrative detention cells violated the Fifth and Eighth Amendments. The district court found that prior to the filing of the class action, the physical conditions of the cells "violated basic concepts of decency," in that "[l]ittle or no ventilation caused the cells to be stuffy and foul-smelling. Four of the cells had no sinks while the commodes and water supply in them could only be controlled from outside the cells. The cell windows were painted over so that there was inadequate light for reading and no view of the outside world." Id. at 876. The district court found that during the pendency of the case, prison officials had undertaken several corrective measures to remedy the situation. Nevertheless, the court noted that the facilities had never been subject to regular inspection, which was "probably why the system came to be so inadequate prior to [initiation of the] action." Id. The court therefore issued a structural injunction requiring the U.S. Bureau of Prisons to (1) provide proper maintenance to the ventilation system in the penitentiary, including annual inspections, (2) afford each inmate confined in disciplinary segregation the opportunity to shower at least twice a week, and to exercise at least two hours per week, (3) continue to have unpainted windows, light bulbs, and sinks and commodes capable of control inside the cells, and (4) maintain the facilities in accordance with policy statements issued by the Bureau. Jordan v. Arnold, 472 F.Supp. 265, 267-68 (M.D.Pa.1979).21

In Bono v. Saxbe, 450 F.Supp. 934 (E.D.Ill.1978), inmates in the maximum-security federal penitentiary in Marion, Illinois, filed a class action alleging that conditions in a particular unit within the penitentiary known as the "Control Unit" violated the Constitution. The district court determined that "[w]hile the general purpose of the control unit passes constitutional muster, as applied there are constitutional infirmities." Id. at 942. In particular,

Id. at 946. The district court entered a structural injunction requiring prison officials to (1) eliminate their use of the box-car cell, (2) submit proposals governing the conduct of hearings to be provided before placing inmates in the control unit, (3) stop placing inmates in the unit solely because of the nature of their crimes or escape attempts, (4) provide guidelines for inmates to follow to expedite their release from the unit, (5) submit a proposal providing for increased physical exercise for prisoners in the unit, and a status report detailing the officials' compliance with the injunction. Id. at 947-48. The prison officials submitted the required proposals and status report, which the district court adopted over the objections of the plaintiffs, although it did increase the required amount of exercise for prisoners in the unit from four to seven hours per week. Bono v. Saxbe, 462 F.Supp. 146 (E.D.Ill. 1978). The court also enjoined the officials from placing an inmate in the control unit without following the procedures set forth in their proposals. Id. at 149.

The Seventh Circuit affirmed, in large part. Bono v. Saxbe, 620 F.2d 609 (7th Cir.1980). It remanded only on the issues of whether the inadequate lighting in the control unit and strip searches conducted before and after non-contact visits constituted cruel and unusual punishment. On remand, the district court ordered the prison officials to develop a reasonable procedure for providing the inmates with either a forty-, sixty-, or hundred-watt light bulb, but determined that the strip searches were constitutionally permissible. Bono v. Saxbe, 527 F.Supp. 1182 (S.D.Ill. 1980). A year later, the plaintiffs asked the district court to issue an order directing the defendants to show cause why they should not be held in contempt for alleged violations of the structural injunction. The plaintiffs alleged that the defendants had violated the provision forbidding the use of the boxcar cell by making use of nine closed-front cells in the control unit. The court denied the plaintiffs' motion, but ordered the defendants to submit a proposal governing the operation of certain aspects of the cells in question. The court adopted the plan submitted by the defendants, over the objections of the plaintiffs, with some modifications. Bono v. Saxbe, 527 F.Supp. 1187 (S.D.Ill.1981).

The third case involved allegations of discrimination in parole standards against female prisoners in federal and local prison facilities in the District of Columbia. In 1976, the Federal Bureau of Prisons entered into a consent decree, mandating that all female inmates sentenced in the District of Columbia should be paroled under local, not federal, standards, regardless of the manner of their offense or the place of their incarceration. Garnes v. Taylor, civil action no. 159-72 (D.D.C. Dec. 10, 1976). See Cosgrove v. Smith, 697 F.2d 1125, 1126 (D.C.Cir.1983).

Of course, the most frequent appearance by a federal agency in prison reform litigation has not been as an institutional defendant, but as a plaintiff or plaintiff-intervenor. As noted by one commentator,

Beyond the Hero Judge at 2024-25.

However, by the 1990s, a widespread perception had emerged that some of the relief awarded in prison reform cases had exceeded acceptable bounds. This prompted the passage of the Prison Litigation Reform Act ("PLRA"), Pub.L. No. 104-134 (codified as amended in scattered titles and sections of the U.S.C.), in 1995. A year later, the Supreme Court issued its opinion in Lewis v. Casey, 518 U.S. 343, 116 S.Ct. 2174, 135 L.Ed.2d 606 (1996), reversing the issuance of a 25-page injunctive order against the Arizona Department of Corrections that "specified in minute detail the times that [prison] libraries were to be kept open, the number of hours of library use to which each inmate was entitled (10 per week), the minimal educational requirements for prison librarians (a library science degree, law degree, or para-legal degree), the content of a videotaped legal-research course for inmates," and other similar matters. Id. at 347, 116 S.Ct. 2174. The Court acknowledged that it was proper for a court to "grant[] relief against actual harm that has been suffered, or that will imminently be suffered, by a particular individual or class of individuals, orders the alteration of an institutional organization or procedure that causes the harm.". Id. at 350, 116 S.Ct. 2174. However, it explained, the district court in Lewis had only identified two instances of actual injury, not a systemwide constitutional inadequacy. Additionally, the Court noted that

Id. at 362, 116 S.Ct. 2174 (citation and internal punctuation marks omitted). In other words, the Court expressed its support of the long-held practice of affording an institutional defendant the first opportunity to propose a remedial plan to cure its statutory or constitutional violations, observing that "[t]he State was entitled to far more than an opportunity for rebuttal." Id. at 363, 116 S.Ct. 2174.

The passage of the PLRA, together with the Supreme Court's decision in Lewis, prompted many commentators to announce that prison reform litigation had been effectively ended. However, reports of the death of such cases are greatly exaggerated. Such litigation "remains a regular and consequential component of the interaction between the court system and the executive and legislative branches of state and local governments," and has evolved to encompass new concerns, such as the needs of women inmates and inmates with disabilities. Beyond the Hero Judge at 2033.

3. Mental Health Facilities

Before the 1970s, men and women afflicted with mental retardation or other mental health problems were frequently committed to state-run facilities that functioned merely as "warehouses" for such individuals. Such facilities often provided little or no medical treatment, and the individuals committed to them were often subject to appalling conditions. Perhaps the best-known litigation involving conditions within state-run mental health facilities is the suit initiated in 1974 against the Pennhurst State School and Hospital, located near Philadelphia. At the time the action was filed,

Halderman v. Pennhurst State Sch. & Hosp., 995 F.Supp. 534, 536 (E.D.Pa.1998). Injuries to Pennhurst residents, either from other residents or self-inflicted, were common. Residents were frequently subjected to physical restraints and psychotropic drugs, not for treatment purposes, but because staff shortages made it impossible to monitor them. Living areas in the Pennhurst facility did not meet minimal standards for cleanliness, and outbreaks of infectious disease were common. Many of the residents suffered both physical deterioration and mental and behavioral regression during their residency at the facility. See Halderman v. Pennhurst State Sch. & Hosp., 446 F.Supp. 1295, 1307-11 (E.D.Pa. 1977) (detailing conditions pervading the facility) (subsequent history omitted).

Having found that the treatment of the Pennhurst residents violated the Eighth Amendment, the district court issued a structural injunction requiring the state of Pennsylvania and the city of Philadelphia to provide each class member with minimally adequate habilitation according to an individualized program, and appointed a special master to monitor compliance with the injunction. Id. at 1326-29. Following a lengthy appeals process, the parties settled, and entered into a consent decree approved by the court. Halderman v. Pennhurst State Sch. & Hosp., 610 F.Supp. 1221 (E.D.Pa.1985). A series of contempt proceedings followed, during which the court determined that the defendants had violated almost every substantive provision of the consent decree. The court's determination resulted in the appointment of additional special masters and specific requirements that, if not met by a specified deadline, would have resulted in the imposition of fines of $5000 per day that the defendants remained in noncompliance. Halderman v. Pennhurst State Sch. & Hosp., 995 F.Supp. at 540-42.

By 1998, however, the court was able to commend the defendants on their compliance with the decree. It terminated its active supervision of the case, observing that

Id. at 548; see also id. at 542-44 (detailing conclusions of studies of the Pennhurst facility). The Pennhurst litigation provides an excellent example of an institutional reform case involving recalcitrant defendants, and of a district court that adopted successful measures addressing such recalcitrance.22 It also demonstrates the wide-ranging public benefits that can result from institutional reform litigation, including not only benefits to the residents of the Pennhurst facility but also to society at large in the form of increased human capital.

4. Public Housing

"Residential housing is probably regulated more heavily than any comparably diverse, fragmented, and competitive market." Peter H. Schuck, Judging Remedies: Judicial Approaches to Housing Segregation, 37 HARV. C.R.-C.L. L. REV. 289, 292 (2002). At the federal level, this regulation includes the Equal Protection Clause of the Fifth and Fourteenth Amendments and the Fair Housing Act of 1968 ("FHA"), 42 U.S.C. § 3601 et seq. Efforts to enforce compliance with the FHA and other federal civil rights laws have included litigation against government agencies alleged to have constructed, financed, or maintained public housing in a racially discriminatory manner. Perhaps the two best-known examples of such litigation are those involving housing in Yonkers and in Chicago.

In the former case, the Justice Department initiated an action against the city of Yonkers, alleging that the city had engaged in racial discrimination in the administration of its public housing programs. The NAACP intervened, and filed an additional claim against the U.S. Department of Housing and Urban Development (HUD). The claim against HUD was settled by the entry of a consent decree requiring HUD to make available 200 units of family and large-family public housing in East Yonkers. United States v. Yonkers Bd. of Educ., 611 F.Supp. 730, 731-32 (S.D.N.Y.1985). The NAACP later filed a motion to compel HUD's compliance with the terms of the consent decree. The district court found that HUD had "pursu[ed] a course of virtually complete inaction," and issued a list of specific actions required by HUD under the decree, together with a timetable of deadlines for compliance. Id. at 739, 741-42.

The court also determined, following a trial on the merits, that the city of Yonkers had intentionally segregated minority residents by constructing all of its public housing in the predominantly minority-resident part of the city, in violation of the Fourteenth Amendment and the FHA. United States v. Yonkers Bd. of Educ., 624 F.Supp. 1276 (S.D.N.Y.1985), aff'd, 837 F.2d 1181 (2d Cir.1987). The court then issued a structural injunction requiring the city to develop a specified number of public housing units in predominantly-white portions of the city by a specified deadline. United States v. Yonkers Bd. of Educ., 635 F.Supp. 1577 (S.D.N.Y.1986). Although the injunction was subsequently affirmed by the Second Circuit, the city decided to defy the court's orders. In 1988, the district court found both the city and several individual city council members to be in civil contempt, and imposed fines of $1 million per day of noncompliance. The Second Circuit affirmed, but the Supreme Court reversed the contempt citations as applied to the individual council members. Spallone v. United States, 493 U.S. 265, 110 S.Ct. 625, 107 L.Ed.2d 644 (1990). Owing to the city's continued resistance, by 2002, only five families had been moved to public housing outside of the predominantly minority-resident part of the city. Shuck, Judging Remedies, at 364. A recent commentator offered this concise assessment of the litigation: "The verdict in Yonkers seems clear: Everyone lost." Id. at 294.

The housing litigation in Chicago has been a different story. In 1966, approximately 43,000 black tenants of and applicants for public housing in Chicago filed an action seeking declaratory and injunctive relief against the Chicago Housing Authority ("CHA") and HUD, alleging that HUD had sanctioned and assisted in CHA's racially discriminatory housing practices. The district court dismissed the complaint against HUD for failure to state a claim. The Seventh Circuit reversed, finding that from 1950-1969, HUD approved and funded the CHA's family-housing projects, even though it admitted that it was aware that CHA was placing such sites solely in predominantly-minority areas of Chicago. Gautreaux v. Romney, 448 F.2d 731, 737 (7th Cir.1971). Although the court acknowledged that HUD's decision was based upon the agency's conclusion that "it was better to fund a segregated housing system than to deny housing altogether" to minority families in Chicago, it nevertheless explained that "a deliberate policy to separate the races cannot be justified by the good intentions with which other laudable goals are pursued." Id. at 737, 738. The Seventh Circuit determined that HUD had violated both the Fifth Amendment and the Civil Rights Act of 1964, and remanded to the district court with instructions to grant summary judgment for the plaintiffs. Id. at 740.

On remand, the district court ordered HUD to use its "best efforts" to increase the supply of dwelling units in conformity with the applicable statutes, rules, and regulations, and with the provisions of an order issued against CHA in a companion case. However, it refused to order relief extending beyond the legal boundaries of the city of Chicago into the outlying suburban areas, because it had previously determined that the discriminatory practices had been committed solely within city limits. Gautreaux v. Romney, 363 F.Supp. 690 (N.D.Ill.1973). The Seventh Circuit reversed and remanded, finding that "federal involvement [was] pervasive" in the housing projects, and directed the district court to adopt "a comprehensive metropolitan area plan that will not only disestablish the segregated public housing in the City of Chicago ... but will increase the supply of dwelling units as rapidly as possible." Gautreaux v. Chicago Housing Authority, 503 F.2d 930, 936, 939 (7th Cir. 1974).

The Supreme Court affirmed. It expressly distinguished Milliken v. Bradley, 418 U.S. 717, 94 S.Ct. 3112, 41 L.Ed.2d 1069 (1974), which had reversed the issuance of a structural injunction affecting suburban areas:

Hills v. Gautreaux, 425 U.S. 284, 297-98, 96 S.Ct. 1538, 47 L.Ed.2d 792 (1976) (internal citations and punctuation omitted). The Court remanded to the district court "for additional evidence and for further consideration of the issue of metropolitan area relief," explaining that "[t]he nature and scope of the remedial decree to be entered on remand is a matter for the District Court in the exercise of its equitable discretion, after affording the parties an opportunity to present their views." Id. at 306, 96 S.Ct. 1538.

What is important to note for purposes of the present litigation is that the presence of a federal agency in an institutional reform case did not prevent the Supreme Court from directing that structural relief be ordered. Indeed, the Court held that the presence of the agency as a defendant actually increased the scope of available injunctive relief that could be ordered by the district court. And in Missouri v. Jenkins, discussed supra, the Court reaffirmed the holding in Gautreaux:

Jenkins, 515 U.S. at 97-98, 115 S.Ct. 2038 (internal citations and punctuation omitted) (emphasis added). The Court thus not only reaffirmed that a structural remedy may be issued against a federal agency, but also explained that such a remedy is less problematic than a similar injunction issued against a state agency, in that the former raises no potential federalism problems.

Following the Supreme Court's decision in Gautreaux, HUD elected to enter into a consent decree rather than submit to a structural injunction imposed by the district court. The court approved the proposed decree, noting that it included not only sweeping metropolitan-area relief, but also provisions requiring "continuing court jurisdiction to monitor the progress in fulfilling the decree while at the same time permitting the parties to modify the decree without resorting to judicial intervention" and "judicial review in five years to insure that the provisions of the decree are being faithfully implemented and to permit any necessary modification." Gautreaux v. Landrieu, 523 F.Supp. 665, 671-72 (N.D.Ill.1981). The decree also included provisions requiring HUD to undertake specific actions within a prescribed time-line. See id. at 672-82 (reprinting the consent decree).

By all accounts, the housing program initiated in response to the Gautreaux decree has proven to be a resounding success. Four Northwestern University professors, after completing two empirical studies in 1982 and 1989, concluded:

James E. Rosenbaum et al., Can the Kerner Commission's Housing Strategy Improve Employment, Education, and Social Integration for Low-Income Blacks?, 71 N.C.L. REV. 1519, 1552-53, 1555 (1993); see also LEONARD S. RUBINOWITZ & JAMES E. ROSENBAUM, CROSSING THE CLASS AND COLOR LINES: FROM PUBLIC HOUSING TO WHITE SUBURBIA (2000). In 1997, the district court terminated the consent decree entered into by HUD. Gautreaux v. Chicago Housing Authority, 981 F.Supp. 1091 (N.D.Ill.1997).

5. Other Settings

Of course, institutional reform litigation does not always involve conditions as dire as those involved in the Arkansas prison litigation, and it does not always garner as much public attention as school desegregation or public housing litigation. Indeed, much institutional litigation receives little press attention, although its effects are certainly felt by the parties involved.

In Cockrum v. Califano, 475 F.Supp. 1222 (D.D.C.1979), a class of claimants appealing the denial, reduction, or termination of Social Security benefits sought injunctive relief against the Secretary of the Department of Health, Education, and Welfare ("the Secretary"). The plaintiffs alleged that the Secretary's failure to issue a final decision on such appeals within 120 days of the denial, reduction, or termination of benefits violated the Social Security Act, the Administrative Procedures Act, and the Fifth Amendment. The district court observed that the case "represent[ed] the local manifestation of a nationwide problem which has been treated throughly in other jurisdictions," and cited seven opinions from cases brought against the Secretary in the First, Second, Sixth, Seventh, and Ninth Circuits. Id. at 1228 & n. 2.23 It concluded that "[t]he Secretary ... has no discretion to delay beyond a reasonable period or to deny plaintiffs their statutory and constitutional rights; his duty is in that sense mandatory. His expertise may entitle him to a role in determining [how] to get from here to there, but he must proceed and get there in a reasonable time. Nor is another adequate remedy available." Id. at 1231. The court rejected HEW's claim that the time for rendering its final decisions was committed wholly to its own discretion:

Id. at 1239 (internal citations omitted) (emphasis added).

The court ordered the defendants "to submit a plan designed in good faith as an operational (not an advocate's) device to reduce the time for decisionmaking and ultimately to permit all decisions to be made within a reasonable time," explaining that "HEW should have the opportunity of first proposing a remedy to the Court which can then determine whether that plan meets HEW's legal responsibilities to plaintiffs." Id. at 1240. The court continued:

Id. at 1240 & n. 19 (emphasis added).

The parallels with the present litigation need scarcely be noted. The plaintiffs in Cockrum, who were dependent upon the Secretary for the payment of benefits that served as their principal means of subsistence, sought injunctive relief in response to the Secretary's undue delay in carrying out his obligations to the plaintiffs. Noting that the Secretary possessed "a higher duty," the district court directed him to submit a remedial plan, explaining that the court would determine whether the plan satisfied the Secretary's obligations to the plaintiffs. Moreover, the court warned that if the agency's officials failed to act in good faith in carrying out the court's mandate, the court would initiate enforcement proceedings to ensure that its mandates were followed.

In another institutional reform case, NAACP v. Brennan, 360 F.Supp. 1006 (D.D.C.1973), migrant and seasonal farm-workers alleged that the U.S. Department of Labor had violated the Fifth Amendment, Title VI of the Civil Rights Act of 1964, and the Wagner-Peyser Act, 29 U.S.C. §§ 49-49k, by approving of and providing funding for state-run employment services that discriminated on the basis of race, national origin, sex, and age. The district court entered a declaratory judgment that the Labor Department had violated the constitutional and statutory provisions cited by plaintiffs. In a subsequent opinion, the court approved a consent decree requiring Labor to undertake a number of specified actions to provide migrant and seasonal farmworkers with employment services on a non-discriminatory basis. NAACP v. Brennan, 8 Empl. Prac. Dec. (CCH) 5696, 1974 WL 229 (D.D.C.1974). The decree provided for the appointment of a Special Review Committee ("SRC") to monitor the decree's implementation. The seven-member SRC was to consist of three representatives for the plaintiffs, three for the defendants, and one chairperson selected by the other six members. Id. at 5700, 1974 WL 229.24

However, as recounted by one of the attorneys in the litigation, because of the passivity of the district court, the Brennan case proved to be a miserable failure. The first problem was that once the implementation of the consent decree began,

James M. Altman, Implementing a Civil Rights Injunction: A Case Study of NAACP v. Brennan, 78 COLUM. L. REV. 739, 750 (1978). Second, the ambiguity of the consent decree's provisions required the SRC to devote seven months to an attempt to formulate standards to measure compliance with the order. However, the partisan structure of the SRC prevented the formation of any consensus regarding adequate standards of compliance. Id. at 757-60. The SRC members representing Labor managed to have the SRC construe narrowly the terms of the decree, including the powers and responsibilities of the SRC itself, in order to "lay the groundwork for a finding that [Labor] had fully implemented the Order." Id. at 766.

The failure of the SRC led the author to address six future recommendations to judges for structuring the post-decree phase of an institutional reform case:

Id. at 766-68.

C. Conclusion

Institutional reform litigation occurs in a variety of different settings. See Beyond the Hero Judge 2034-35 ("More generally, outside jails and prisons, there is a large amount of current litigation and ongoing court-ordered reform in the areas of, for example, child welfare, mental health and mental retardation facilities, juvenile correctional facilities, public housing, and public school funding. And new areas of litigation are opening up.") (footnotes omitted); Sabel & Simon, supra. Although the vast majority of institutional defendants in such cases have been state and local government agencies, a distinct number of institutional reform cases have been brought against federal agencies. In these cases, the courts have shown no reluctance to issue structural injunctions against federal government entities, or to approve consent decrees they have entered into. It would appear from the above survey that one of the reasons that structural injunctions have been infrequently issued against federal entities is that, rather than endure the imposition of such remedies, most federal agencies instead choose to enter into consent decrees. See also Pigford v. Glickman, 185 F.R.D. 82, 111 (D.D.C.1999) (approving a consent decree agreed to by the U.S. Department of Agriculture, which had allegedly engaged in race discrimination against African-American farmers); Walker v. U.S. HUD, 734 F.Supp. 1231 (N.D.Tex.1989) (discussing consent decree entered into HUD in public housing case).

However, the fact that the present case involves a federal defendant does add a new issue that has not been a factor in many other institutional reform cases— namely, the application of the separation-of-powers principle. It is to this issue that the Court now turns.

III. SEPARATION OF POWERS

A. Introduction

Although federal courts frequently examine federalism concerns when considering whether to issue a structural injunction against a state or local government entity, they do not examine the relevance of the separation-of-powers principle. The reason is that the Supreme Court has determined that "the separation-of-powers principle, like the political-question doctrine, has no applicability to the federal judiciary's relationship to the States." Elrod v. Burns, 427 U.S. 347, 352, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976). However, because the present case involves a federal agency, the Department of the Interior, the Court must analyze whether the issuance of a structural injunction against a federal governmental entity poses separation-of-powers problems.

To the Court's knowledge, this issue has been raised in only two federal cases, neither of which have resolved it.25 The first case is the long-running Adams desegregation litigation, several of the earlier opinions in which are discussed supra. In a later opinion, the D.C. Circuit entertained an appeal of an injunction issued by the district court, together with the underlying consent decree in the case, by the secretaries of the Departments of Education and Labor, the assistant secretary for civil rights of the Department of Education, and the director of the Office of Federal Contract Compliance Programs. These federal officials claimed that the injunction and decree "impermissibly intrude[d] on their statutory and constitutional authority to manage and supervise their agencies' enforcement of various civil rights laws" and "violate[d] fundamental principles of separation of powers." Women's Equity Action League v. Bell, 743 F.2d 42, 42-3 (D.C.Cir.1984). They also claimed that the current plaintiffs in the action lacked standing. The D.C. Circuit determined that it was "unable to decide these issues in the first instance," and remanded to the district court. Id. at 44. It stressed that "the `threshold' and `merits' issues involved are discrete" and therefore "a ruling on the threshold issue of standing does not decide the issue whether certain relief granted after reaching the merits of a controversy would adversely implicate separation-of-powers limitations." Id.26

On remand, the district court found that its prior orders violated the separation-of-powers principle and dismissed the action. Adams v. Bennett, 675 F.Supp. 668 (D.D.C.1987). But the D.C. Circuit reversed the dismissal. It explained that the district court had "obscured under a `standing' headline issues properly analyzed discretely." Women's Equity Action League v. Cavazos, 879 F.2d 880, 886 (D.C.Cir.1989). It continued:

Id. (internal citations and punctuation omitted) (emphasis added). After holding that the plaintiffs possessed standing, the D.C. Circuit directed that the remaining issues raised in the earlier appeal be briefed and argued, including the question of whether the district court possessed the authority "to impose procedural or enforcement requirements (timeframes, compliance monitoring, and reporting) supplementing those set out in the governing legislation[.]" Id. at 887. This issue was never resolved, however, because the D.C. Circuit dismissed the action on the grounds that the statutes at issue created no right of action against federal agencies, as opposed to private defendants. Women's Equity Action League v. Cavazos, 906 F.2d 742 (D.C.Cir.1990).

The sole discussion of this particular separation-of-powers issue by the Supreme Court is to be found in the concurring opinion of a single Justice in Missouri v. Jenkins who, after offering an originalist critique of the concept of structural injunctions, indicated some concern that such injunctions might raise separation-of-powers problems. See Jenkins, 515 U.S. at 131-37, 115 S.Ct. 2038 (Thomas, J., concurring). However, this concern did not lead to the adoption of any standard for determining whether such injunctions exceeded permissible bounds, but only a recommendation that "[t]o ensure that they do not overstep the boundaries of their Article III powers, . . . district courts should refrain from exercising their authority in a manner that supplants the proper sphere reserved to the political branches, who have a coordinate duty to enforce the Constitution's dictates. . ." Id. at 136, 115 S.Ct. 2038.27

Given the lack of guidance on this specific issue, the only useful authority that this Court has found consists of previous opinions involving separation-of-powers issues raised by clashes between the executive and judicial branches. The Court must therefore analyze these cases to determine what guidance they provide.

B. Judicial-Executive Separation of Powers Cases

In United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974), the President of the United States asserted that "the independence of the Executive Branch within its own sphere insulates the President from a judicial subpoena in an ongoing criminal prosecution, and thereby protects confidential Presidential communications." Id. at 706, 94 S.Ct. 3090. The Court recognized that the necessity for the President and his assistants to prevent from disclosure the expression of "candid, objective, and even blunt or harsh opinions in Presidential decisionmaking" justified the creation of a "presumptive privilege for Presidential communications" whose existence was "fundamental to the operation of Government and inextricably rooted in the separation of powers under the Constitution." Id. at 708, 94 S.Ct. 3090. However, the Court explained,

The right to the production of all evidence at a criminal trial similarly has constitutional dimensions. The Sixth Amendment explicitly confers upon every defendant in a criminal trial the right "to be confronted with the witnesses against him" and "to have compulsory process for obtaining witnesses in his favor." Moreover, the Fifth Amendment also guarantees that no person shall be deprived of liberty without due process of law. It is the manifest duty of the courts to vindicate those guarantees, and to accomplish that it is essential that all relevant and admissible evidence be produced.

Id. at 711, 94 S.Ct. 3090. The Court was thus confronted with two irreconcilable claims of coordinate branches of government, each of which were grounded in a power of that branch possessing a constitutional dimension. On the one hand, the existence of the presidential communication privilege would seem to proscribe the disclosure of confidential presidential communication on the subpoenaed tapes. On the other hand, the duty of the courts to give effect to the Fifth and Sixth Amendments by means of its subpoena power would seem to require the disclosure of relevant evidence in a pending criminal trial. Because it was impossible to honor both competing claims, the Court was forced to develop a means that would resolve the difficulty: "Since we conclude that the legitimate needs of the judicial process may outweigh Presidential privilege, it is necessary to resolve those competing interests in a manner that preserves the essential functions of each branch." Id. at 707, 94 S.Ct. 3090 (emphasis added).

The Court examined the relevant interest of the judicial branch: "The very integrity of the judicial system and public confidence in the system depend on full disclosure of all the facts, within the framework of the rules of evidence. To ensure that justice is done, it is imperative to the function of courts that compulsory process be available for the production of evidence needed either by the prosecution or by the defense." Id. at 709, 94 S.Ct. 3090. It then analyzed the interest of the executive branch:

Id. at 710, 711, 94 S.Ct. 3090. The Court then proceeded to weigh the competing interests, and reached its conclusion:

Id. at 711-13, 94 S.Ct. 3090.

One of the key observations made by the Nixon Court is that the adjudication of separation-of-powers issues does not turn on an assumption that the branches must operate independently of one another:

Id. at 707, 94 S.Ct. 3090. Instead, the Nixon Court concluded, the interdependence and reciprocity of a workable government will necessarily lead to situations in which the functions of one branch will conflict with the functions of another. Sometimes, the Constitution clearly dictates which branch should prevail in such a conflict—for example, the president's pardon power prevails over the judgment of courts in criminal cases, and a supermajority vote of Congress prevails over the president's veto power. In other instances, however, the decision is not so clearcut. When the courts are asked to resolve such conflicts, they must do so "in a manner that preserves the essential functions of each branch." Such a resolution turns on the nature of each branch's claim, and the degree to which that claim is related to the traditional or textually-defined purposes of that branch.

The Court concluded that a highly specific claim that is directly and persuasively related to a traditional or textually-defined purpose of one branch will prevail over a more generalized claim that is less clearly or directly related to a traditional or textually-defined purpose of another branch. ("We conclude that when the ground for asserting privilege as to subpoenaed materials sought for use in a criminal trial is based only on the generalized interest in confidentiality, it cannot prevail over the fundamental demands of due process of law in the fair administration of criminal justice. The generalized assertion of privilege must yield to the demonstrated, specific need for evidence in a pending criminal trial."). It also concluded that courts should examine which claim, if adopted, would be less likely to result in a sustained, fundamental impairment of the traditional or textually-designated functions of one of the two branches. ("However, we cannot conclude that advisers will be moved to temper the candor of their remarks by the infrequent occasions of disclosure because of the possibility that such conversations will be called for in the context of a criminal prosecution. On the other hand, the allowance of the privilege to withhold evidence that is demonstrably relevant in a criminal trial would cut deeply into the guarantee of due process of law and gravely impair the basic function of the courts.")

The Court's opinion three years later in Nixon v. Adm'r of Gen. Servs., 433 U.S. 425, 97 S.Ct. 2777, 53 L.Ed.2d 867 (1977), continued and expanded upon the mode of analysis developed in United States v. Nixon for treating separation-of-powers claims. Former President Nixon mounted a constitutional challenge to a statute requiring an executive official to take custody of his presidential papers and tape recordings. Nixon's claims included an assertion that the statute violated the separation-of-powers principle, in that it represented an attempt by Congress to interfere with executive functions. The Court rejected this claim, observing that Nixon's argument was

Id. at 441-43, 97 S.Ct. 2777 (internal citations and punctuation omitted) (emphasis added). The Court thus reiterated that the form of analysis it had developed in United States v. Nixon was the appropriate method to use in cases involving separation-of-powers claims that are not clearly and unambiguously resolved by the text of the Constitution. Rather than insisting upon a rigid separation of functions among the three branches, the Court instead stressed that such an analysis should be a pragmatic, functional inquiry. Instead of asking whether an action by one branch intrudes upon the actions of another, the proper question is one of degree, examining "the extent to which" such an action prevents the other branch "from accomplishing its constitutionally assigned functions." If a court determines that such an action presents the potential to disrupt the accomplishment of such functions, then it must examine "whether that impact is justified by an overriding need to promote objectives within the constitutional authority" of the other branch. In developing this functionalist analysis, the Court looked for guidance to the writings of James Madison and Joseph Story:

Similarly, Mr. Justice Story wrote:

Id. at 443 n. 5, 97 S.Ct. 2777.

Though it added little to the development of separation-of-powers law, Morrison v. Olson, 487 U.S. 654, 108 S.Ct. 2597, 101 L.Ed.2d 569 (1988), did continue the Court's use of a functional approach to separation-of-powers issues. In upholding the constitutionality of the independent counsel statute, the Court observed:

Id. at 693, 695, 108 S.Ct. 2597 (citations and internal punctuation omitted) (emphasis in original). Once again citing Justice Jackson's oft-quoted words from Youngstown, the Court emphasized its functional approach to separation-of-powers claims, finding that the independent counsel act neither "impermissibly undermine[d] the powers of the Executive Branch" nor "disrupt[ed] the proper balance between the coordinate branches by preventing the Executive Branch from accomplishing its constitutionally assigned functions."

Similarly, despite its high-profile nature, Clinton v. Jones, 520 U.S. 681, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997), added little to already-existing separation-of-powers law, apart from demonstrating still another application of the Court's functional analysis. In rejecting the assertion that the separation-of-powers principle requires courts to stay all private actions against a sitting president until he leaves office, the Court explained:

Id. at 701-03, 117 S.Ct. 1636 (footnote omitted) (internal citations and punctuation omitted).

On the other hand, Mistretta v. United States, 488 U.S. 361, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989), which involved a separation-of-powers challenge to the operations of the U.S. Sentencing Commission, added a further element to the analysis: namely, whether a function is appropriately assigned to a particular branch because of its special knowledge and expertise. The Court began by reviewing past separation-of-powers jurisprudence in the light of Madison's principles:

Id. at 380-83, 109 S.Ct. 647 (internal citations and punctuation omitted).

Analyzing the first of these two dangers, the Court first noted that "consistent with the separation of powers, Congress may delegate to the Judicial Branch nonadjudicatory functions that do not trench upon the prerogatives of another Branch and that are appropriate to the central mission of the Judiciary" and that "we have never held, and have clearly disavowed in practice, that the Constitution prohibits Congress from assigning to courts or auxiliary bodies within the Judicial Branch administrative or rulemaking duties that, in the words of Chief Justice Marshall, are `necessary and proper . . . for carrying into execution all the judgments which the judicial department has power to pronounce.'" Id. at 388, 389, 109 S.Ct. 647 (citation omitted). It then rejected the argument that the placement of the Sentencing Commission within the judicial branch violated the separation-of-powers principle because the Commission's tasks were more properly accomplished by the two political branches:

Id. at 391, 392, 109 S.Ct. 647 (internal citations and punctuation omitted) (emphasis added).

The Court also rejected the notion that the creation of the Commission impermissibly threatened the institutional integrity of the judiciary, in that the judicial branch "is inevitably weakened by its participation in policymaking":

Id. at 395-96, 109 S.Ct. 647 (internal citations and punctuation omitted) (emphasis added).

Mistretta thus represents a further application of the functional analysis developed in the two Nixon cases. In Mistretta, the Court eschews applying formal labels such as "procedural," "substantive," "political," and "judicial" in favor of examining the "practical consequences" of the function at issue. It also notes its past approval of measures that "to some degree commingle the functions of the Branches, but that pose no danger of either aggrandizement or encroachment." But in Mistretta, the Court enhances its functional analysis by adding a new component: an inquiry into whether the function at issue is appropriate to the branch exercising it, either because it is one in which the branch has long exercised substantive judgment or possesses special knowledge or expertise. This new component may be understood as raising the issue of institutional competence, that is, whether a branch can be expected to utilize a particular function with skill, discretion, and care because it involves an area in which the branch possesses special knowledge or expertise.

C. Analysis

It is clear from the above-discussed cases that the separation-of-powers principle does not require the branches to operate with absolute independence of one another. To the contrary, the Constitution presumes, and in some cases requires, the commingling of functions between two or more branches. When the functions of one branch conflict with the functions of another, however, the courts must resolve such conflicts in a manner that preserves the essential functions of each branch. Such a resolution requires an inquiry into the nature of each branch's claim, into the degree to which that claim is related to the traditional or textually-defined purposes of that branch, and into which disputed function is less likely to result in a sustained, fundamental impairment of the traditional or textually-designated purposes of one of the branches. The nature of the court's inquiry is functional, not formalistic.

The interest identified by Interior is the ability of executive agencies to manage their affairs as they deem appropriate. This interest finds a textual basis in the admonition of the Constitution that the president shall "take Care that the Laws be faithfully executed ..." U.S. CONST. art. II, § 3. In the present case, Interior asserts that this interest would be unduly restricted by the issuance of a structural injunction, in that such an injunction would unduly interfere with its ability to direct the management of the IIM trust, including the performance of a historical accounting.

However, as noted by the D.C. Circuit, the Take Care Clause "does not permit the President to refrain from executing laws duly enacted by the Congress as those laws are construed by the judiciary." Nat'l Treasury Employees Union v. Nixon, 492 F.2d 587, 604 (D.C.Cir.1974) (emphasis added). Additionally, the court concluded:

Id. at 604-05 (internal citations omitted). This understanding of the Take Care Clause was enshrined in law as early as 1861, when Chief Justice Roger Taney declared that under the authority vested in the president by the clause, the president was

Ex parte Merryman, 17 Fed. Cas. 144, 149 (1861) (emphasis added).

The interest of the judiciary in the present case, on the other hand, is the interest in taking remedial measures necessary to give effect to its substantive judgments. The remedial power is an aspect of the "judicial Power of the United States" vested in the federal courts by Article III of the Constitution. See, e.g., Muskrat v. United States, 219 U.S. 346, 356, 31 S.Ct. 250, 55 L.Ed. 246 (1911) ("Judicial power ... is the power of a court to decide and pronounce a judgment and carry it into effect between persons and parties who bring a case before it for decision.") (citation and internal punctuation omitted); Nat'l Automatic Laundry & Cleaning Council v. Shultz, 443 F.2d 689, (D.C.Cir.1971) ("The broad consideration involved in judicial review of agency actions ... is not merely the declaration of the rights of the private litigants but the functioning of the judicial process. In our overall pattern of government the judicial branch has the function of requiring the executive (or administrative) branch to stay within the limits prescribed by the legislative branch."); Coffey v. Braddy, 372 F.Supp. 116, 124 (M.D.Fla.1971) ("[T]he Courts of the United States are empowered by Congress and, moreover, have the inherent power to enter such orders as may be necessary to effectuate their judgments, decrees and orders and to prevent interference with, and obstruction to, their implementation."). Additionally, "the power of [federal courts] to apply the rules of equity in any case is derived from section 2 of article III of the Constitution, wherein it is declared that `the judicial Power of the United States shall extend to all Cases in Law and Equity, arising under this Constitution [and] the Laws of the United States...'" United States v. Certain Parcels of Land, 131 F.Supp. 65, 71 (S.D.Cal.1955).

It is clear that the nature of Interior's claim is what the Court in United States v. Nixon described as a "broad, undifferentiated claim." That is, Interior has not demonstrated that the issuance of a structural injunction in the present case would result in a sustained, fundamental impairment of the executive branch's ability to manage its affairs as it deems appropriate. This is because, generally speaking, the ability of the courts to issue relief in cases involving an executive agency's interpretation of a statute is limited by the doctrine outlined in Chevron, U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). However, the D.C. Circuit has held that Chevron deference is not applicable in the present case. The Court therefore has no fear that the issuance of structural relief in the present case will spawn imitator suits seeking similar relief because virtually no other cases involve the unusual posture of the present case: to wit, the lack of Chevron deference and the status of the federal defendant as a trustee-delegate, with the concomitant limitations on discretion that such status imposes. In other words, the interest of Interior is not a specific claim that the issuance of a structural injunction in the present case will result in the undermining of the executive branch's ability to "take Care that the laws be faithfully executed." Rather, it is a generalized claim that the deference that is due all executive agencies in the management of their affairs should prevent any injunctive relief that affects Interior's management of the IIM trust. However, the level of deference due Interior in the present case is particularly weak, as recognized by the D.C. Circuit:

By contrast, the interest of the judicial branch in taking remedial measures necessary to give effect to its substantive judgments is intimately related to the "judicial power" vested in the federal courts by Article III. Inasmuch as Interior does not indicate why the remedial authority of the Court in the present case is unusually restricted, for this Court to conclude that it may not issue structural relief in the present case would necessarily entail it to conclude that federal district courts may never issue a structural injunction against a federal agency, regardless of the individual circumstances. Such a conclusion would cut deeply into the capacity of the courts to effect one of their primary functions —to afford relief commensurate to redressing claims that they have adjudicated. It would also require the overruling of Gautreaux and the host of other cases discussed in the previous section.

The issue, therefore, is the relative importance of the generalized need for executive agencies to manage their affairs as they deem appropriate as weighed against the importance of the demonstrated, specific need for federal courts to issue appropriate injunctive relief in their adjudication of cases. The Court simply cannot conclude that, if the latter need prevails, the executive branch will be likely to suffer a sustained, fundamental impairment of its ability to "take Care that the laws be faithfully executed." Additionally, as this Court explained in a previous memorandum opinion:

Cobell VII, 226 F.Supp.2d at 142-43; cf. Perez v. Boston Housing Authority, 379 Mass. 703, 400 N.E.2d 1231, 1252 (1980) ("But if it is a function of the judicial branch to provide remedies for violations of law, including violations committed by the executive branch, then an injunction with that intent does not derogate from the [separation-of-powers] principle... To the contrary, when the executive persists in indifference to, or neglect or disobedience of court orders, . . . it is the executive that could more properly be charged with contemning the separation principle.").

However, Interior has directed this Court's attention to several cases that (it asserts) demonstrate the existence of "well-established principles governing judicial review of agency action and the separation of powers concerns that underlie these principles" that prevent the issuance of a structural injunction in the present case. Defs.' Proposed Findings of Fact and Conclusions of Law at 238 ("Defs' Prop. Findings and Conclusions"). The Court must therefore analyze the holdings in these cases to determine whether they proscribe the issuance of structural injunctive relief in the present case.

Interior begins with two quotations from Federal Power Comm'n v. Idaho Power Co., 344 U.S. 17, 73 S.Ct. 85, 97 L.Ed. 15 (1952). In that case, the Supreme Court reversed the decision of an appellate court that had modified a portion of a license issued by the Federal Power Commission to construct a hydroelectric plant, and then remanded to the agency with instructions to issue the license, as modified. The Court explained:

Id. at 20-21, 73 S.Ct. 85 (internal citations and punctuation omitted).

However, none of the separation-of-powers cases analyzed above based their decisions on any distinction between "essentially administrative" and "essentially judicial" functions. Additionally, the leading commentator on the federal courts has noted that inasmuch as "[t]here is no formula for identifying the divide between properly judicial matters and legislative or administrative matters," in general, the federal courts have refused to recognize the existence of an "administrative question doctrine" akin to the political question doctrine. 13A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 3535 (2d ed.1984). Thus, for example, during the September 5, 2000 oral arguments on Interior's interlocutory appeal of this Court's 1999 decision, one judge on the D.C. Circuit's panel explicitly rejected Interior's assertion that because "Congress expected the reconciliation process to be done administratively," this Court lacked jurisdiction to determine the scope of a historical accounting before Interior itself had decided how and to what extent it intended to do so. The judge responded: "[W]e spend our lives reviewing judicially those things which are to be done first administratively. I am not sure why you think it advances the ball any to say Congress meant for it to be done administratively[.]" Cobell VII, 226 F.Supp.2d at 39 & n. 37.

Similarly, in Heisler v. Parsons, 312 F.2d 172 (7th Cir.1962), the Seventh Circuit rejected a mandamus petition sought against a district judge who had reviewed a determination rendered by the National Mediation Board. In response to the petitioners' argument that exclusive jurisdiction over the issue was committed to the Board, the Court explained: "The fact that legal rights may, in some respects, depend upon issues committed to administrative determination, does not exclude the courts from jurisdiction to enforce such rights. The courts have consistently taken jurisdiction of actions to settle legal rights which involved premises of an exclusively administrative nature." Id. at 176 (citing cases). In the present case, it will not be necessary to determine whether the "administrative question doctrine" possesses any continuing vitality. It is enough to note that this supposed doctrine possesses no relevance to the issues currently before the Court.

Interior next cites United States v. Saskatchewan Minerals, 385 U.S. 94, 95, 87 S.Ct. 254, 17 L.Ed.2d 192 (1966) for the proposition that "after declaring agency action unlawful (or unreasonably delayed), courts may not seek to control the processes by which an agency fulfills its Congressionally-mandated functions on remand." Defs.' Prop. Findings and Conclusions at 103. Saskatchewan Minerals is a single-paragraph opinion which states, in its entirety:

Id. at 94-95 (internal citations and punctuation omitted) (emphasis added). Precisely how Interior deduces such a sweeping conclusion from this brief, insignificant case, the holding in which is clearly restricted to the individual circumstances of the case under review (whatever those circumstances might be) is, admittedly, quite a mystery to this Court.28

Interior also directs this Court's attention to the Supreme Court's seminal decision in Vermont Yankee Nuclear Power Corp. v. NRDC, Inc., 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978). In Vermont Yankee, a court reviewing the rulemaking proceedings of the Atomic Energy Commission concluded, "despite the fact that it appeared that the agency employed all the procedures required by 5 U.S.C. § 553 ... and more," that the proceedings were inadequate, and remanded to the agency for additional rulemaking proceedings. Id. at 535, 98 S.Ct. 1197. As all students of administrative law know, the Supreme Court reversed, holding that section 553

Id. at 524, 98 S.Ct. 1197 (footnote omitted). The present case, however, is not a review of a rulemaking decision made by Interior. Instead, it is a determination of whether Interior's Plans for conducting an historical accounting and for bringing itself into compliance with its fiduciary duties comport with its fiduciary duties, the existence of which were confirmed and supplemented (but not created) by the 1994 Act. In other words, this Court is reviewing Interior's compliance with the mandates of the 1994 Act, which, as the D.C. Circuit has already determined, makes clear that Interior possesses fiduciary duties (including the duty to account) with respect to the IIM trust, and that these duties predate the passage of the Act. Vermont Yankee thus possesses little relevance for a court reviewing an agency's compliance with the substantive and procedural requirements of a federal statute, as opposed to a court reviewing the decision of an agency adopted after the completion of a rulemaking proceeding performed in compliance with 5 U.S.C. § 553. Thus, for example, in United States Lines, Inc. v. Federal Maritime Commission, 584 F.2d 519 (D.C.Cir. 1978), the D.C. Circuit remanded a rulemaking decision back to a federal agency whose rulemaking proceedings had not complied with statutory mandates, explaining:

Id. at 543 n. 63 (citation omitted).

Nor is In re Barr Laboratories, 930 F.2d 72 (D.C.Cir.1991), particularly relevant to the present case. In that case, the D.C. Circuit denied a petition seeking a writ of mandamus to compel the Food and Drug Administration (FDA) to act, either by approving or disapproving applications submitted by Barr. Although it determined that FDA had repeatedly violated the 180-day deadline for approving or disapproving such applications, it stressed that "[t]he issue before us... is not whether the FDA's sluggishness has violated a statutory mandate—it has—but whether we should exercise our equitable powers to enforce the deadline." Id. at 75. Noting the "vague and secondhand character of Barr's claim," the D.C. Circuit concluded that the FDA's delay was not egregious and that the agency had not acted in bad faith. Id. It therefore dismissed the case, but invited Barr to refile his claim, "should circumstances arise that would change the outcome of our analysis." Id. at 76.

However, the present case is not before this Court on a writ of mandamus. Moreover, while the D.C. Circuit's 2001 opinion in this case quoted the statement in Barr Laboratories that "a finding that delay is unreasonable does not, alone, justify judicial intervention," it immediately qualified that statement in a footnote: "But see [Forest Guardians v. Babbitt, 174 F.3d 1178, 1191 (10th Cir.1999)] (`once a court deems agency delay unreasonable, it must compel agency action.')" Cobell VI, 240 F.3d at 1096 & n. 4 (emphasis added). The D.C. Circuit then determined that Interior's delay in discharging its fiduciary obligations was both unreasonable and egregious:

Id. at 1096-97. In short, the D.C. Circuit clearly did not view Barr Laboratories as controlling in the present case, given the very different circumstances that have given rise to the present action.

Next, Interior cites three cases in support of its assertion that "even in exceptional cases in which an agency has flagrantly disregarded a congressionally-mandated deadline for rulemaking, the appropriate judicial role is to retain jurisdiction and require periodic progress reports until the agency has completed the required action." Defs.' Prop. Findings and Conclusions at 105. It is true that in each of these cases, the respective courts did remand back to the agencies, in the first instance. But nowhere did the courts indicate that the "3 Rs" (remanding, retaining jurisdiction, and requiring progress reports) were the only steps that a court could take under such circumstances. For instance, in Global Van Lines v. ICC, 804 F.2d 1293 (D.C.Cir.1986), the D.C. Circuit reversed the issuance of a shipping permit, and remanded to the ICC for further proceedings. In a footnote, it explained its disposition of the case: "We agree with the Commission that when an agency committing an error of law has discretion to determine in the first instance how it should be rectified, the proper course is to remand the case for further agency consideration in harmony with the court's holding." Id. at 1305 n. 95 (citations omitted). The D.C. Circuit never indicated that remanding was the sole relief that might be afforded by a court reviewing agency action. Additionally, as explained above, Interior's discretion in the present case is more limited than the discretion normally afforded to administrative agencies, in that it is the trustee-delegate of the United States with respect to the IIM trust.

In In re United Mine Workers of Am. Int'l Union, 190 F.3d 545 (D.C.Cir.1999), the court declined to issue a writ of mandamus compelling the Mine Safety and Health Administration (MSHA) of the U.S. Department of Labor to issue final regulations regarding gaseous emissions in the exhaust of diesel engines used in underground coal mines. Having explained that mandamus is an "extraordinary remedy," the court concluded that "issuance of a writ of mandamus at this time could do more harm than good," and decided to retain jurisdiction in lieu of issuing such a writ. Id. at 549, 556. However, the court concluded: "Prior to final agency action, [petitioners] may petition this court to grant additional appropriate relief in the event MSHA fails to adhere substantially to a schedule that would ... constitute a good faith effort by MSHA to come into compliance with the Mine Act." Id. at 556. The Court first notes that, unlike United Mine Workers, the present action involves neither rulemaking proceedings nor consideration of a mandamus writ. However, it is also noteworthy that the D.C. Circuit indicated its willingness to afford "additional appropriate relief" beyond the mere retention of jurisdiction, if MSHA failed to demonstrate good-faith compliance with the applicable statutory requirements.

Nor is this the only case in which the D.C. Circuit, in denying a mandamus petition against an agency, has demonstrated its willingness to afford relief beyond merely remanding to the agency. In In re Monroe Communications Corp., 840 F.2d 942 (D.C.Cir.1988), the court declined to issue a mandamus writ against the Federal Communications Commission (FCC) directing the agency to act on certain matters related to a license renewal hearing, explaining that "the delay at issue here is not so great as to justify that response." Id. at 943. However, it explained, "the unusual circumstance of an unrebutted allegation of bad faith leads us to retain jurisdiction over the case until the license is awarded to ensure the kind of progress promised at oral argument." Id. at 947 (footnote and citations omitted). It also warned: "We hope that the FCC will resolve this matter in the way it has indicated, . . . and that we will not be called on to intrude on its internal processes." Id. (emphasis added). Thus, in at least two recent cases, the D.C. Circuit has expressly stated that remanding to an administrative agency that has unreasonably delayed final agency action is not the sole relief that may be afforded against the agency.

Finally, in support of its assertion that its status as a fiduciary "do[es] not authorize judicial intervention in the initial process by which a coordinate branch of the government decides on a plan of action and executes that action," Defs.' Prop. Findings and Conclusions at 105-06, Interior cites Lincoln v. Vigil, 508 U.S. 182, 195, 113 S.Ct. 2024, 124 L.Ed.2d 101 (1993). In Lincoln, the Indian Health Service (IHS) of the U.S. Department of Health and Human Services decided to terminate a program for treating handicapped Indian children in the Southwest, and reallocate its funding to support a nationwide effort to assist handicapped Indian children. Handicapped Indian children in the Southwest responded by seeking declaratory and injunctive relief under the APA. The Court first noted that IHS received funds in the form of lump-sum appropriations from Congress under two acts that authorized IHS to "expend such moneys as Congress may from time to time appropriate, for the benefit, care, and assistance of the Indians" for the "relief of distress and conservation of health" and to receive expenditures for "therapeutic and residential treatment centers" for Indians. Id. at 185, 113 S.Ct. 2024 (citations omitted). It then observed that

Id. at 192, 113 S.Ct. 2024 (citations and internal punctuation omitted). Because the relevant appropriations acts did not even mention the program for Indian children in the Southwest, the Court concluded that the decision to terminate the program and reallocate the money towards a nationwide program was committed to IHS's discretion, and was precluded from judicial review pursuant to 5 U.S.C. § 701(a)(2).

The Court observed that under section 701(a)(2), "review is not to be had in those rare circumstances where the relevant statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion." Id. at 191, 113 S.Ct. 2024 (citation and internal quotation marks omitted). It also explained:

Id. at 193, 113 S.Ct. 2024 (internal citation omitted).

The present case involves a program that is not funded by lump-sum appropriations to Interior, but rather is specifically mentioned in the appropriations acts that provide for its funding. This is because appropriations for the management of the IIM fund and for the completion of a historical accounting are made in accordance with the mandates of the 1994 Act. Additionally, the 1994 Act is not so narrowly drawn that this Court possesses no meaningful standard against which to judge Interior's exercise of discretion. Instead, Interior's duty to account, like its other fiduciary duties, are to be administered in accordance with the well-established body of American trust law.

In sum, Interior has failed to direct this Court to any case law that would preclude the issuance of a structural injunction in the present case on separation-of-powers grounds. The Court will therefore proceed to examine the final component of the separation-of-powers analysis that has been developed by the Supreme Court: namely, whether the authority to issue a structural injunction is appropriate in the present case because the particular substantive area of this case is one in which the judicial branch has long exercised substantive judgment or possesses special knowledge or expertise. Specifically, the Court must examine whether, in cases involving the nature and scope of a trustee's fiduciary duties, the courts have issued wide-ranging injunctive relief to compel a trustee's compliance with such duties.

D. The Role of the Courts in Trust Cases29

1. Introduction

The addition of this component to the functional separation-of-powers analysis requires the Court to clarify the nature of the present analysis. The Court is not attempting to determine whether, under any given set of circumstances, a federal district court may issue a structural injunction against a federal agency. Such a determination is far broader than required. Rather, the Court is presently attempting to determine whether the circumstances of the present case, in which a federal agency is a defendant, somehow preclude the issuance of a structural injunction. In the present case, the United States has delegated to a federal agency the responsibility to manage and administer a trust. This delegation thereby charges the federal agency with the fiduciary duties of a trustee, and therefore any legal determination of whether the agency has complied with those duties must first look to the law of trusts. Therefore, in the course of the present inquiry, the Court must look to the law of trusts to examine the remedial authority exercised by courts in trust cases, and to determine whether that remedial authority is consistent with the imposition of a structural injunction.

2. American Trust Law

"Just as the colonists of the thirteen original states adopted substantially entire the common law of England, so they took over with little change the English scheme of equity jurisprudence, a part of which was the system of trusts." GEORGE T. BOGERT, TRUSTS 14 (6th ed.1987). The definitive statement of the American law of trusts is to be found in the official Restatements promulgated by the American Law Institute. In 1957, the Restatement of Trusts, Second ("Restatement, Second") was completed, superseding The Restatement of the American Law of Trusts, which had been published in 1935. In 2003, the first two volumes of the third Restatement of the Law of Trusts ("Restatement, Third") were issued, superseding the applicable portions of the Restatement, Second.

The fact that the remedial tradition in the American law of trusts has been one based in equity is nowhere more clearly seen than in the Restatement, Second, which notes that "questions of the administration of trusts have always been regarded as of a kind which can adequately be dealt with in a suit in equity rather than in an action at law, where questions of fact would be determined by a jury and not by the court." Restatement, Second § 197 cmt. b; see also id. § 197 (providing, with a single exception, that "the remedies of the beneficiary against the trustee are exclusively equitable"). An equitable remedy is defined as "a remedy given by a court of chancery or a court having and exercising the powers of a court of chancery." Id. § 197 cmt. a. Cf. Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 154, 105 S.Ct. 3085, 87 L.Ed.2d 96 n. 10 (1985) ("Trust-law remedies are equitable in nature, and include provision of monetary damages.") (Brennan, White, Marshall, Blackmun, JJ., concurring) (citations omitted).

The equitable remedies available to a beneficiary against a trustee are listed in section 199 of the Restatement, Second: "The beneficiary of a trust can maintain a suit (a) to compel the trustee to perform his duties as trustee; (b) to enjoin the trustee from committing a breach of trust; (c) to compel the trustee to redress a breach of trust; (d) to appoint a receiver to take possession of the trust property and administer the trust; (e) to remove the trustee." Explaining the nature of the first three types of suit, the Restatement, Second provides:

Id. § 199 cmts. a-c (internal citations omitted). As this Court has previously observed,

Cobell VII, 226 F.Supp.2d at 136. Additionally, the preeminent treatise on the law of trusts has explained that

3 AUSTIN W. SCOTT & WILLIAM F. FRATCHER, THE LAW OF TRUSTS § 199.1 (4th ed.1988) (emphasis added) ("Scott on Trusts")

Generally speaking, trust law is state law. Therefore, until relatively recently, the federal courts have had little occasion to interpret the nature and scope of trust remedies. One noteworthy exception is Beckett v. Air Line Pilots Ass'n, 995 F.2d 280 (D.C.Cir.1993). In Beckett, the parties had entered into a consent decree under which the Air Line Pilots Association was to administer a trust account for the benefit of a number of pilots. The pilots later filed a claim to enforce the consent decree, asserting that the decree had created an enforceable trust, and that the Association had administered the trust in a manner inconsistent with its duties as a trustee. The D.C. Circuit reversed the district court's award of summary judgment for the Association, holding that the court possessed subject-matter jurisdiction over the pilots' trust claim "pursuant to the well-established principle that a trial court retains jurisdiction to enforce consent decrees and settlement agreements." Id. at 286 (citations omitted). Turning to the question of whether the pilots could maintain a suit for specific performance of the consent decree, the D.C. Circuit first noted: "Just as an intended third party beneficiary may sue to enforce a contract, it is equally fundamental that the beneficiary of a trust may maintain a suit to compel the trustee to perform his duties as trustee or to redress a breach of trust." Id. (citing Restatement, Second § 199). It then determined that "a trust was indeed created. And because appellants are beneficiaries of that trust, they may sue to enforce the duties owed to them by [the Association] as trustee." Id. at 287. The D.C. Circuit also determined that the Association had breached its duty of loyalty, and remanded to the district court. In sum, the D.C. Circuit recognized, as a matter of federal common law, that trust beneficiaries may maintain a suit in equity to compel the performance of a trustee's fiduciary duties.

Additionally, since at least 1989, the federal judiciary has been developing a federal common law of trusts in conjunction with the interpretation of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq. ("ERISA"), which governs the administration of pension and employee benefit plans. As explained by Professor John Langbein, "Both in substance and in remedy ERISA is, in its most important dimension, federal trust law." John H. Langbein, What ERISA Means by "Equitable": The Supreme Court's Trail of Error in Russell, Mertens and Great-West (forthcoming in Columbia Law Review).30 Rather than devise a new regulatory framework for eliminating abuse in the administration of pension and employee benefit plans, Congress instead simply adapted the well-established law of trusts by mandating that "all assets of an employee benefit plan shall be held in trust by one or more trustees." Id. (quoting 29 U.S.C. § 1103). In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court honored the intent of Congress by prescribing that "courts are to develop a federal common law of rights and obligations under ERISA-regulated plans." Id. at 110, 109 S.Ct. 948 (citations and internal quotation marks omitted). It further stated that "[t]he extent of the duties and powers of a trustee is determined by the rules of law that are applicable to the situation, and not the rules that the trustee or his attorney believes to be applicable, and by the terms of the trust as the court may interpret them, and not as they may be interpreted by the trustee himself or by his attorney." Id. at 112, 109 S.Ct. 948 (emphasis in original) (quoting 3 Scott on Trusts § 201); see also Eddy v. Colonial Life Ins. Co. of Am., 919 F.2d 747, 750 (D.C.Cir.1990) ("Rather than explicitly enumerate all of the duties of ERISA fiduciaries, Congress invoked the common law of trusts to define the general scope of their responsibility.") (citation and internal punctuation omitted).

The federal courts responded to the Supreme Court's mandate in Bruch by creating a federal common law of trusts, to be drawn upon in interpreting the rights of beneficiaries of pension and employee benefit plans. They were also obliged to create a body of remedial trust law, in that ERISA authorized a plan beneficiary (1) to "recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan" and (2) "to enjoin any act or practice which violates any provision of ... the terms of the plan, or to obtain other appropriate equitable relief to redress such violations" in suits against a fiduciary. 29 U.S.C. §§ 1132(a)(1)(B), 1132(a)(3). Of course, if a court states only that it is determining which remedies are available under a specific provision of ERISA, that determination cannot necessarily be taken as a statement of federal trust law. On the other hand, if a federal court presiding over an ERISA case renders a determination about the requirements of trust law, including a determination about remedies available under the law of trusts, that determination should be considered to be statement of the federal common law of trusts.31

Regarding remedial trust law, the D.C. Circuit has explained: "Trust law contemplates the use of broad and flexible equitable remedies as means for dealing with breaches of fiduciary duty, and it imposes the obligation upon the courts to use the remedy that is most advantageous to the participants and that will most closely effectuate the purposes of the trust." Crawford v. La Boucherie Bernard Ltd., 815 F.2d 117, 120 (D.C.Cir.1987) (citation omitted). In applying the remedial provisions of ERISA, the federal courts have drawn upon the traditionally wide remedial discretion afforded to courts in trust cases. For example, they have appointed receivers to manage plans, and removed fiduciaries. See, e.g., Brock v. Robbins, 830 F.2d 640, 647 (7th Cir.1987) ("If the Secretary [of Labor] can prove to a court that certain trustees have acted imprudently, even if there is no monetary loss as a result of the imprudence, then the interests of ERISA are furthered by entering appropriate injunctive relief such as removing the offending trustees from their positions.") (citation omitted); Katsaros v. Cody, 744 F.2d 270 (2d Cir.1984) (affirming the removal of trustees of pension funds); Marshall v. Snyder, 572 F.2d 894 (2d Cir.1978) (affirming the appointment of a receiver to manage an employee benefit plan); Corley v. Hecht Co., 530 F.Supp. 1155 (D.D.C. 1982) (removing the trustee of an employee benefit plan). The federal courts have also utilized less intrusive equitable remedies, such as the appointment of plan administrators or investment managers. See Katsaros, 744 F.2d at 281-83 (affirming the appointment of a plan asset manager); Donovan v. Mazzola, 716 F.2d 1226, 1238-39 (9th Cir.1983) (affirming the appointment of a plan investment manager).

Additionally, the federal courts have recognized that a permanent injunction is one of the remedies available to federal courts adjudicating trust cases:

Beck v. Levering, 947 F.2d 639, 641 (2d Cir.1991) (internal citations and punctuation omitted). Thus, federal courts have enjoined individuals and entities from serving as a fiduciary in any plan governed by ERISA. See id. at 642 (affirming the issuance of an order permanently enjoining defendants from serving as fiduciaries or service providers to any ERISA plan); Reich v. Lancaster, 55 F.3d 1034, 1054 (5th Cir.1995) (same); Martin v. Feilen, 965 F.2d 660, 673 (8th Cir.1992) (same); Martin v. Rutledge, 807 F.Supp. 693, 697 (N.D.Ala.1992) (same); Whitfield v. Tomasso, 682 F.Supp. 1287, 1306-07 (E.D.N.Y.1988) (enjoining defendants from serving as fiduciaries or service providers to any ERISA plan, either permanently or for a ten-year period).

In the present case, Interior serves as the trustee-delegate of the United States with respect to the IIM trust. Accordingly, Interior's discretion with respect to the administration of the IIM trust is more restricted than the discretion normally granted to executive agencies in the management of their own affairs. Its own former Solicitor has acknowledged that "[a] number of court decisions hold that the federal trust responsibility constitutes a limitation upon executive authority and discretion to administer Indian property and affairs," and proceeded to cite three Supreme Court decisions and four decisions by the U.S. Court of Claims. Letter from Interior Solicitor Leo Krulitz to Assistant Attorney General James Moorman 7 (Nov. 21, 1978) (Pls.' Ex. 88).32 Additionally, the D.C. Circuit has explained:

Cobell VI, 240 F.3d at 1099 (internal citations and punctuation omitted).

The Court therefore determines that the issuance of a structural injunction is consistent with the broad remedial authority afforded to courts in trust cases, including federal courts applying the common law of trusts in ERISA cases. It also concludes that the issuance of structural relief against a trustee is an appropriate function for the judicial branch to exercise, in that the judiciary has long exercised substantive judgment in the area of trust law, and has frequently issued broad-ranging injunctive relief to compel a breaching trustee to comply with its fiduciary duties. Put another way, making determinations as to the nature and scope of appropriate equitable relief against a trustee has been a traditional judicial function, one in which the judicial branch possesses special knowledge and expertise. It is true that the Court has not located any ERISA case involving the issuance of a structural injunction. However, given the willingness of federal courts to appoint receivers to manage ERISA plans and even to order the removal of ERISA plan trustees, the obvious conclusion is not that structural relief is not within the authority of federal courts applying trust law, but that the appointment of a receiver or the removal of a trustee is considered to be a more appropriate measure to remedy the widespread violation of fiduciary duties by a trustee.

Finally, it is noteworthy that one of the most frequently-cited articles on institutional reform litigation notes the continuity between the broad remedial authority that has long been available in trust cases and the remedial authority afforded courts presiding over institutional reform cases:

Theodore Eisenberg & Stephen C. Yeazell, The Ordinary and the Extraordinary in Institutional Litigation, 93 HARV. L. REV. 465, 483-84, 485, 489 (1980) (footnotes and internal punctuation omitted).33

E. Conclusion

The stereotypical picture that comes to mind when one hears the phrase "trust fund" is a fund created by a wealthy patrician to maintain his heirs' extravagant life-style. However, the IIM trust fund is far removed from such images of affluence. A large portion of its beneficiaries depend on their fund disbursements in order to live at a subsistence level. For many, their disbursements represent their sole means of purchasing food for themselves and their families. See Cobell VI, 240 F.3d at 1097 ("Given that many plaintiffs rely upon their IIM trust accounts for their financial well-being, the injury from delay could cause irreparable harm to plaintiffs' interests as IIM trust beneficiaries. Thus it seems that the interests at stake are not merely economic interests in an administrative scheme, but personal interests in life and health.") (citation and internal punctuation omitted). The IIM beneficiaries thus embody the very definition of institutional reform plaintiffs, in that they are dependent upon a service provided exclusively by a government entity to satisfy a fundamental need. The plaintiffs in the prison reform and mental health cases sought adequate treatment by the public facilities that confined them. The plaintiffs in the school desegregation cases sought the provision of an adequate public education. Gautreaux and its progeny involved the provision of adequate public housing. And in the present litigation, many of the IIM beneficiaries depend on disbursements from the IIM trust fund to support their very existence.

The circumstances of the present case make it particularly appropriate that the court issue a structural injunction. One of the most controversial aspects of institutional reform litigation has been the ambiguity surrounding the source and scope of the newly-created substantive rights that courts have recognized and enforced in such litigation. Often, such rights are founded upon constitutional provisions. For example, courts in prison reform litigation usually rely upon the Cruel and Unusual Punishments clause of the Eighth Amendment as the basis for their jurisdiction, and courts overseeing desegregation cases typically look to the Equal Protection Clause of the Fourteenth Amendment. The open-ended nature of such rights has often made it difficult to fashion appropriate standards for granting relief. By contrast, in the present case, the rights sought to be enforced by plaintiffs are the traditional fiduciary duties of trust law, as affirmed and supplemented by the 1994 Act. As explained above, courts have developed a well-defined body of substantive and remedial law to govern the enforcement of such rights.

A second controversial aspect of institutional reform litigation has been the issue of federalism. The Supreme Court's institutional reform jurisprudence, especially in the area of school desegregation, frequently urges the federal courts to consider the importance of state and local control over public services. But federalism concerns are absent where, as here, the institutional defendant is a federal agency rather than a state or local entity. And, as noted above, in Jenkins, the Court observed that the issuance of a structural injunction against a federal agency is not only permissible, but is also less problematic than the issuance of such an injunction against a state or local entity, in that it does not raise federalism concerns.

Additionally, the issuance of a structural injunction in this case will not violate the principle of separation of powers. In the present case, the demonstrated, specific interest of the judicial branch in affording injunctive relief to the extent necessary to give effect to its substantive judgments outweighs Interior's generalized interest in exercising untethered administrative discretion regarding the management of issues over which Congress has vested it with jurisdiction. The issuance of structural relief will not result in a sustained, fundamental impairment of Interior's ability to "take Care that the laws be faithfully executed." Nor has the Court been directed to any caselaw indicating that the issuance of a structural injunction under the present circumstances will violate the separation-of-powers principle.

Moreover, the issuance of a structural injunction is appropriate in the present case because the particular substantive area of this case—the law of trusts—is one in which the judicial branch possesses special knowledge or expertise. The judiciary has long exercised substantive judgment in this area, and has routinely issued broad-ranging injunctive relief to compel a trustee's compliance with its fiduciary duties, including permanent injunctive relief and the appointment of receivers to manage trusts.

The Court must stress the limited nature of its holding. The Court holds only that where the United States is the settlor of a trust, and has been adjudicated to possess the fiduciary duties of a trustee, the presiding court may issue a structural injunction against the agency to which the United States has delegated its responsibility to administer the trust, if the court deems it to be necessary to compel the trustee-delegate's performance of its fiduciary duties. Nothing in the present opinion should be construed as authorizing the issuance of a structural injunction against a federal agency under any other circumstances. It is only the extremely unusual circumstances surrounding the present case, in which Interior's discretion is unusually restricted by reason of its fiduciary status as the trustee-delegate of the United States, that compels this Court to reach the conclusion that structural injunctive relief is appropriate.

IV. THE MANDATES OF THE D.C. CIRCUIT

The final preliminary issue to be addressed is whether the issuance of a structural injunction is inconsistent with the mandates of the two D.C. Circuit opinions issued in the present case, Cobell VI and Cobell VIII.

A. Cobell VI

Ever since the February 23, 2001 decision of the D.C. Circuit in the present litigation, it has been the frequent practice of both parties to cite isolated sentences from this opinion in their respective briefs, marshaling them forth in support of their varying positions. By isolating individual phrases or sentences from their surrounding context, the parties have fostered a misleading impression of the D.C. Circuit's holding. Thus, in order to prevent any further misunderstanding of the D.C. Circuit's conclusions in Cobell VI, the Court will excerpt that opinion at some length.

In 1999, this Court determined that Interior and Treasury had breached their fiduciary duties to the IIM beneficiaries. It remanded to these agencies, directing them to take steps to bring them promptly into compliance with their fiduciary duties. To ensure that defendants would act with diligence to rectify their continuing breaches of trust, the Court retained jurisdiction for a five-year period, subject to enlargement. It also directed defendants to file quarterly status reports setting forth and explaining the steps they had taken to rectify these breaches and to bring themselves into compliance with their fiduciary duties. The Court concluded by noting that it had "based much of its decision today—especially the denial of more extensive prospective relief—on defendants' plans (in both substance and timing) to bring themselves into compliance with their trust duties declared today and provided for explicitly by statute." Cobell V, 91 F.Supp.2d at 59. It also directed that if, at some future date, "plaintiffs believe that they are entitled to further prospective relief based upon information contained in these reports or otherwise learned, they may so move at the appropriate juncture. Such a motion will then trigger this court's power of judicial review." Id. It then certified its decision for interlocutory review.

The D.C. Circuit affirmed. It summarized its decision in an introductory paragraph:

Cobell VI, 240 F.3d at 1086. It is noteworthy that the D.C. Circuit characterized the relief awarded as "well within the district court's equitable powers," and neither stated nor implied that, in affording such relief, this Court had reached the outer bounds of its remedial authority.

The D.C. Circuit continued:

Id. at 1096-97 (internal citation omitted). This passage is noteworthy in several respects. First, the D.C. Circuit recognized that "the 1994 Act is not the source of plaintiffs' rights"; rather, such rights predate the passage of the Act. Later in the opinion, the D.C. Circuit fully explained this conclusion. Second, it rejected defendants' assertion that the time frame for compliance with their fiduciary duties was committed wholly to their discretion. Third, it agreed with this Court that "absent court intervention, discharge of the government's fiduciary obligations may yet be far off." The D.C. Circuit never indicated that it considered the minimal relief awarded by this Court in 1999 to represent the outer limit of permissible court intervention to ensure the discharge of the defendants' fiduciary obligations. Indeed, it subsequently observed that "the district [court] acted well within its power to provide modest equitable relief, requiring appellants to do little more than develop plans to ensure proper discharge of their duties within a reasonable time. The district court did not exceed its powers with this order, nor with its decision to maintain jurisdiction over the case." Id. at 1098. The characterization of the relief ordered in 1999 as "modest equitable relief" strongly indicates that the issuance of additional, more intrusive equitable relief was well within the bounds of this Court's authority.

The most definitive statement on the subject of this Court's remedial authority in Cobell VI, however, is to be found in the section entitled "Relief":

Id. at 1108 (emphasis added) (citations and internal punctuation omitted). In this remarkable passage, the D.C. Circuit recognized that in effecting Interior's compliance with its fiduciary duties, this Court possesses "broad equitable relief." It further directed that this Court may order "any appropriate relief" within its "full range of remedial powers" that it deems "necessary to cure the appellants' legal transgressions." The D.C. Circuit expressly recognized that "courts are presumed to possess the full range of remedial powers—legal as well as equitable— unless Congress has expressly restricted their exercise," a principle that has been repeatedly recognized. See, e.g., Franklin v. Gwinnett County Public Schools, 503 U.S. 60, 66, 112 S.Ct. 1028, 117 L.Ed.2d 208 (1992) ("[W]e presume the availability of all appropriate remedies unless Congress has expressly indicated otherwise. This principle has deep roots in our jurisprudence."); Crocker v. Piedmont Aviation, 49 F.3d 735, 749 (D.C.Cir.1995) ("But the Supreme Court has made clear that even with respect to implied causes of action, courts are presumed to possess the full range of remedial powers—legal as well as equitable—unless Congress has expressly restricted their exercise.") (citation omitted); SEC v. First City Fin. Corp., Ltd., 890 F.2d 1215, 1230 (D.C.Cir.1989) ("Unless otherwise provided by statute, all the inherent equitable powers of the District Court are available for the proper and complete exercise of that jurisdiction.") (quoting Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946)).

As may be observed in its choice of citations, the D.C. Circuit included within the scope of relief available to this Court the issuance of a structural injunction. Brown II and Swann are Supreme Court decisions analyzing the nature and scope of relief that federal district courts may award in school desegregation cases. The D.C. Circuit expressly determined that the fact that this case "involves decades-old Indian trust funds rather than segregated schools does not change the nature of the court's remedial powers." As noted above, institutional reform litigation began with the initiation of school desegregation cases, and structural injunctions are routinely awarded by district courts in such cases.

The D.C. Circuit further observed:

Id. at 1109 (emphasis added).

It is only after making such sweeping statements of this Court's remedial authority that the D.C. Circuit included the following two paragraphs under the heading "Future Proceedings":

Id. at 1109-10 (emphasis added) (citations and internal punctuation omitted). In filing after filing in the present case, Interior has quoted the two underlined sentences from Cobell VI, or portions thereof, as though it were a phonograph needle stuck in a groove. Such filings invariably fail to include any other quotations to or citations from the remainder of the D.C. Circuit's opinion. It is as if, in Interior's collective mind, Cobell VI consists of only two individual sentences in the Federal Reporter.

Moreover, Interior has both overestimated and misrepresented the importance of these two sentences, which fall at the tail end of the D.C. Circuit's opinion. First, the court twice emphasized that in neither of these two sentences was it attempting to make any conclusive determination as to the scope and nature of this Court's authority to review plaintiffs' claims. Instead, the D.C. Circuit specifically observed that it would be "premature ... to rule on the precise scope of the district court's planned proceedings." Then, following its statement about what "may" lie outside the scope of this Court's jurisdiction, the D.C. Circuit again reiterated that "until these proceedings have begun, and specific objections are brought, these are questions we cannot address." Second, the statement that this Court be "mindful of the limits of its jurisdiction" comes at the very end of an opinion in which the D.C. Circuit made clear that the jurisdiction of this Court included the authority to award "any appropriate relief" within its "full range of remedial powers" that it deems "necessary to cure the appellants' legal transgressions." In other words, the D.C. Circuit was not admonishing this Court to recall that its remedial authority was somehow artificially constrained; rather, it was urging this Court to be "mindful" that, given the "broad equitable relief" at its disposal, it should proceed with careful deliberation if it were to decide to issue such relief.

In sum, nothing in Cobell VI is inconsistent with the issuance of a structural injunction in the present case. The Court therefore turns to the D.C. Circuit's most recent opinion in this case.

B. Cobell VIII

As noted above, on July 18, 2003, the D.C. Circuit vacated the contempt sanctions imposed by this Court against defendants Norton and McCaleb. It also vacated the order appointing the Special Master-Monitor, and directed this Court to enter an order granting the defendants' motion to revoke the appointment of Joseph Kieffer as Court Monitor. However, it discussed only briefly the completed Phase 1.5 trial, alluding to it in the course of rejecting Interior's argument that this Court "overstepped the bounds of judicial authority," and that relief was therefore warranted pursuant to 28 U.S.C. § 1292(a)(1). Cobell VIII, 334 F.3d at 1137. Specifically, the D.C. Circuit explained:

Id. at 1138 (internal citations and punctuation omitted).

Thus, while it acknowledged the possibility that the Phase 1.5 trial might conclude with the issuance of a structural injunction, the D.C. Circuit said nothing about the propriety or impropriety of such relief. Instead, the court simply observed that, if such an injunction were issued, it would be appealable under section 1292(a)(1). The Court therefore concludes that nothing in Cobell VIII is inconsistent with the issuance of a structural injunction in this litigation.

C. The Nature and Scope of the Court's Review

Of course, having determined that this Court possesses the authority to enter structural injunctive relief in the present case does not resolve the issue of whether such relief is warranted. The Court must analyze Interior's accounting plan to determine whether, if implemented, it would satisfy Interior's duty to account to the IIM trust beneficiaries.

It must be clearly stated at the outset that the Court's approval of Interior's Plan, or of any portion thereof, does not mean that the Court is bound to approve the ultimate accounting that will be provided. The Court's approval is limited to the Plan, which merely sets forth the framework by which the accounting shall be provided. After the accounting has taken place, and any objections are made, final judicial review of the accounting will be available in the Phase II trial.

Applying the Supreme Court's decisions in Brown II and Lewis v. Casey, the Court has concluded that an institutional defendant must be afforded the initial opportunity to present a plan to the presiding court to satisfy its obligations to the plaintiff class. The court should accept the defendant's plan unless it concludes that the provisions of the plan, if implemented, will not satisfy the legal obligations to the plaintiffs that were determined in the liability phase of the case. See Cockrum v. Califano, 475 F.Supp. 1222, 1240 (D.D.C.1979) (ordering defendants "to submit a plan designed in good faith as an operational (not an advocate's) device to reduce the time for decisionmaking and ultimately to permit all decisions to be made within a reasonable time," and explaining that defendant HEW "should have the opportunity of first proposing a remedy to the Court which can then determine whether that plan meets HEW's legal responsibilities to plaintiffs."). If the court does make such a conclusion, it may decide to modify the institutional defendant's plan, adopt a plan submitted by another entity, or formulate a plan of its own that will satisfy the defendant's liability. Although the plan devised by the institutional defendant is entitled to considerable weight, in that the defendant will be the entity responsible for implementing the decision of the court, the court should reject the institutional defendant's plan if it plainly appears to the court that the plan will not satisfy the defendant's legal obligation to the plaintiff class.

It will thus be necessary to state precisely the duty owed by Interior to plaintiffs, as it relates to the performance of an historical accounting. In Cobell VI, the D.C. Circuit explicated the nature of this duty under the heading "Duty to Account":

Cobell VI, 240 F.3d at 1102-04 (emphasis in original) (internal citations and quotation marks omitted).

Unsurprisingly, Interior has repeatedly cited certain sentences from the penultimate paragraph in this excerpt, setting them forth as an alleged demonstration that the nature and scope of the historical accounting is committed entirely to its discretion. In so doing, it has misstated the D.C. Circuit's holding. The D.C. Circuit provided only that the initial decision "of how the accounting would be conducted, and whether certain accounting methods, such as statistical sampling or something else, would be appropriate" was "properly left in the hands of administrative agencies." In other words, the D.C. Circuit found that Interior retains discretion, in the initial instance, to select the particular methods it intends to employ in conducting an historical accounting. The D.C. Circuit did not conclude, however, that Interior possesses the authority to determine whether its proposed historical accounting complies with the provisions of the 1994 Act or with "the government's preexisting fiduciary duty to perform a complete historical accounting of trust fund assets." Indeed, it is "emphatically the province and duty of the judicial department to say what the law is." Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60 (1803). Therefore, in the words of the D.C. Circuit, it is the task of this Court to determine, inter alia, whether Interior's Plan will provide a "fair and accurate accounting of all trust accounts," an accounting for "all funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian which are deposited or invested pursuant to the Act of June 24, 1938," an "adequate" accounting, "sufficient to serve the purposes for which a trust accounting is typically conducted," one that "contain[s] sufficient information for the beneficiary readily to ascertain whether the trust has been faithfully carried out." It follows that if the Court determines that the initial selection of any particular method by Interior would result in the performance of an accounting that does not comport with these standards, it may reject the use of such a method as inconsistent with discharging Interior's duty to account.

Nor is the task of the Court limited to the determination of whether Interior's Plan comports with the specific provisions of the 1994 Act. The D.C. Circuit made clear that Interior's duty to account is not limited by the specific requirements contained in the 1994 Act:

Cobell VI, 240 F.3d at 1098, 1100-01 (emphasis in original) (internal citations and punctuation omitted).

Because this Court "must infer that Congress intended to impose on trustees traditional fiduciary duties unless Congress has unequivocally expressed an intent to the contrary," the question arises whether Interior possesses the traditional fiduciary duty to account. The Restatement, Second provides that "[t]he trustee is under a duty to the beneficiary to keep and render clear and accurate accounts with respect to the administration of the trust." Restatement, Second § 172 (1957). The comments to section 172 provide a fuller explanation of the nature and scope of this duty:

Id. § 172 cmts. a-c; see also 2A Scott on Trusts § 172, at 452 ("The term `duty to account' may have any one of three different meanings: (1) a duty to keep records; (2) a duty to report to the beneficiaries or to a court the course of administration of the trust; (3) a duty to pay amounts that the trustee should pay to the beneficiaries. Ordinarily a trustee has all three of these duties.").

As explained at length in the companion memorandum opinion issued this date, Interior has failed to demonstrate to this Court that Congress has unequivocally expressed an intent not to impose upon Interior, as the trustee-delegate of the United States, this traditional fiduciary duty to account. Accordingly, this Court holds that the United States, as the trustee of the IIM trust fund, possesses the traditional fiduciary duty to account, as defined by the Restatement of Trusts, Second; and that the United States has delegated this duty to the Interior Department, as the trustee-delegate of the IIM trust fund.34 To the extent that any specific provision of the 1994 Act actually conflicts with the traditional fiduciary duty to account, as defined at common law, such a provision would supersede. However, to the extent that the 1994 Act is silent as to Interior's duty to account, or its provisions do not actually conflict with the common-law duty to account, "the interstices [of the Act] must be filled in through reference to general trust law."

Put simply, it is the task of Interior to make the initial selection of the particular methods it plans to employ in conducting an historical accounting. It is the task of the Court to determine whether the accounting plan comports with both the specific provisions of the 1994 Act and with "the government's preexisting fiduciary duty to perform a complete historical accounting of trust fund assets." Such a determination may include a conclusion that the selection of a particular method, in and of itself, that Interior plans to employ in its performance of an historical accounting will result in an accounting that does not comport with the 1994 Act or with Interior's preexisting fiduciary duties. Such a conclusion is tantamount to a determination that the use of such a method will necessarily delay, rather than accelerate, the performance of an adequate accounting. In this context, the D.C. Circuit has pointed out that the Interior Secretary

Cobell VI, 240 F.3d at 1099 (internal citations and quotation marks omitted). Thus, it is emphatically the province of this Court, and not Interior, to judge whether its accounting plan, if implemented, would satisfy "the most exacting fiduciary standards" required of a trustee.

The Court now turns to Interior's Accounting Plan to determine whether, if implemented, it will satisfy "the government's preexisting fiduciary duty to perform a complete historical accounting of trust fund assets," as reaffirmed by the specific requirements of the 1994 Act relating to Interior's duty to account.

V. THE PLANS

A. An Overview of Interior's Accounting Plan

1. Introduction

It will be useful to analyze the accounting plan proposed by Interior as taking place in a series of stages. Any formal accounting of a trust conducted by a trustee must include at least four basic processes. First is the collection process, which entails the collection of all documents and records that must be analyzed in order to prepare the accounting. Second is the accounting process proper. In this stage, the trustee analyzes the documents and records it has collected. Utilizing the information contained in such documents, the trustee creates a detailed report describing the trustee's conduct during the relevant time period, including a description of each item of property within the trust corpus, all items of property received into or disbursed from the trust, all income earned by the trust, and all expenses paid by the trust. This report is the "accounting statement." Third is the reporting process, which entails the delivery of the accounting statement to the beneficiaries of the trust. These three processes occur sequentially. However, there is also a fourth process that occurs simultaneously with the other three: the quality control process. During the collection process, the quality control process consists of measures taken by the trustee to ensure that it is collecting all documents and records necessary to perform an accounting, and that the information contained in the documents and records it collects are reliable and accurate. During the accounting process, the quality control process consists of measures taken by the trustee to ensure that the accounting statement it prepares accurately reflects all of the relevant information contained in the documents and records it has collected. Finally, during the reporting process, the quality control process consists of measures taken by the trustee to ensure that all beneficiaries of the trust receive the accounting statement prepared by the trustee, and that they are furnished with all the information they need to make sense of the statement.

Although Interior's Accounting Plan, as submitted to the Court, is not organized according to this scheme, the Accounting Standards Manual it has prepared does utilize this scheme.35 Accordingly, the Court will present a brief overview of the Plan employing this four-part analytical scheme. Following this presentation, the Court will critically analyze Interior's Accounting Plan in some detail.

2. The Collection Process

The collection process consists of two steps. First, Interior proposes to establish an index of the trust records within its possession or control. Second, Interior proposes to fill "gaps" in its records by requesting trust records from third parties.

a. Indexing of Trust Records

Interior estimates that the federal government holds approximately 195,000 boxes or containers of Indian trust records, containing an estimated 300 to 500 million pages. Interior's Accounting Plan at app. E-2 (Defs.' Ex. 55). However, Interior acknowledges that the existing inventories and indexes of the trust records are neither consistently detailed nor accurate enough to permit these records to be easily searched. The indexing approach proposed by Interior consists of creating an electronic database for the trust records, "much like transforming a traditional library catalog card index for books into an electronic reference database." Id. Interior has engaged the firm of Labat-Anderson, Inc. to index the approximately 93,000 boxes of records contained in government facilities in Albuquerque and Lee's Summit, Missouri. It estimates that the indexing project will be completed by fiscal year 2004 (which ends on September 30, 2004).

b. Collection of Missing Trust Records from Third Parties

Interior acknowledges that there may be gaps in the trust records that must be filled prior to undertaking a full accounting. It proposes to seek records from the IIM beneficiaries themselves and from third parties such as oil and timber companies. With respect to the former, Interior proposes, with the Court's permission, to distribute a mass mailing to the IIM beneficiaries requesting information about trust records in their possession. With respect to the latter, Interior has published a Federal Register notice and distributed a mass mailing aimed at energy companies requesting that any parties who possess IIM trust records contact the Interior Department. Interior has also engaged private contractors and consultants, including professional historians, to try to identify potential sources of Indian trust records.

c. Compilation of Transaction Histories

After the collection process has been completed, Interior proposes to create an electronic account transaction history for transactions occurring in the Paper Records Era (1887-1985). As for the Electronic Records Era (1985-2000), Interior proposes to compile another electronic account transaction history using data retrieved from two Interior computer systems: the Integrated Records Management System ("IRMS") and the Trust Funds Accounting System ("TFAS").

3. The Accounting Process

a. The Three Categories of Accounts

In its Plan, Interior states that it will "conduct a historical accounting of all IIM accounts that were open as of December 31, 2000, and all IIM accounts that were open as of October 25, 1994, or opened thereafter, but closed as of December 31, 2000." Id. at III-1. For these accounts, Interior plans to provide an account transaction history dating back to June 24, 1938 (the date the Indian Reorganization Act was passed) or the inception date of the account, whichever date is later. If an account was opened before June 24, 1938, the balance on June 24, 1938 will be considered to be the opening balance of the account.

Interior has estimated that, as of December 31, 2000, the IIM trust fund contains over 257,000 accounts with an aggregate balance of over $416 million. It has identified and defined three distinct types of accounts existing within the IIM trust fund:36

The "low-hanging fruit," the judgment and per capita accounts, are most easily dealt with. Interior's Plan represents that its accounting for these accounts will be completed in fiscal year 2004 (which ends on September 30, 2004), at an estimated cost of $2.5 million. Interior also estimates that all SDAs will be accounted for (and, presumably, closed) in the early part of fiscal year 2007 (which ends on September 30, 2007). It also estimates that the cost of this portion of the accounting will be approximately $27 million. Id.

As stated above, Interior estimates that, as of December 31, 2000, the trust fund contained approximately 194,000 land-based accounts containing an aggregate balance of about $198 million, or about 48% of the total aggregate balance. Interior estimates that the process of ascertaining values for the transactions in the land-based accounts will take place in two stages. With respect to the Electronic Records Era (1985-2000), the process is expected to be completed late in fiscal year 2005 (which ends on September 30, 2005). With respect to the Paper Records Era, the process is expected to be completed in fiscal year 2006 (which ends on September 30, 2006). This portion of the accounting is estimated to cost $200 million. Id. at III-14.

b. Verification of Transactions

Of course, when performing an accounting, it does not suffice simply to produce a history of transactions—a trustee must provide adequate supporting documentation to demonstrate that each recorded transaction did, in fact, take place. Interior has provided the following summary of the verification process:

Id. at III-9.

For special deposit accounts, and judgment and per capita accounts, Interior represents that it will employ a transaction-by-transaction accounting; in other words, it plans to verify each individual transaction within these accounts by reconciling each transaction with supporting financial documents and ownership information. Interior has developed an Accounting Standards Manual that identifies the types of supporting documentation that will be considered adequate to support the existence of a given transaction. Additionally, if supporting documentation is missing with respect to a transaction occurring on a periodic basis (e.g., a monthly lease payment), Interior indicates that it might try to identify similar transactions occurring within the period, identify supporting documentation for those transactions, and then project the anticipated amount of the missing transaction. Id. at III-13.

However, for the land-based accounts, Interior proposes to undertake a transaction-by-transaction accounting only for transactions with a value of $5,000 or more. As for all remaining transactions in the land-based accounts, Interior plans to rely upon statistical sampling to verify these transactions. Although the number of transactions with a value of less than $5,000 during the Paper Records Era is not known, Interior estimates that during the Electronic Records Era, approximately 26.4 million transactions with a value of less than $5,000 were posted to the IIM trust fund. Id. at III-12. This represents 99% of the total estimated number of transactions—approximately 26.5 million— that were posted during that period. Id.

4. The Reporting Process

After the completion of the collection and accounting processes, Interior proposes to provide each IIM account holder with a statement of account for the period for which the accounting was performed. This statement of account will include "an opening balance, the transaction history of income or receipts and disbursements and balance and ending balance, along with explanatory materials of what the process was all about and any findings that [Interior possesses that are] related to the verification process." Tr., Day 21, AM session (June 4, 2003), at 20:7-11 (testimony of James Cason).37 Also, following the completion of the collection and accounting processes, Interior intends to provide each IIM account holder ("with information regarding [his or her] land assets as of December 31, 2000)."38 Interior's Accounting Plan at 2. At some unspecified future date, Interior also "intends to provide a listing of trust assets along with a report on the management of the funds generated from those assets and from other sources with each quarterly statement." Id.

5. The Quality Control Process

a. Tests of the IIM Trust Systems

Interior's Accounting Plan proposes to conduct a number of tests designed to ascertain the extent to which the information contained within the management system of the IIM trust fund can be relied upon as the basis to conduct an accounting of the IIM trust fund. Interior represents that the purpose of these tests is to determine whether (1) a significant amount of data is missing in its electronic systems; (2) accounts or balances were lost or inappropriately "dropped" from the system during conversions from paper records into the IRMS system, or from the IRMS system into the TFAS system; (3) Interior accurately calculated interest for the IIM accounts; (4) the monies collected by Interior were actually deposited into the IIM trust fund; and (5) Interior's land ownership records are accurate. Id. at III-18. Interior estimates that the cost of these tests will be approximately $25 million, and estimates they will be completed by fiscal year 2006 (which ends on September 30, 2006).

b. Other Quality Control Measures

Interior also represents that it is implementing quality control checks at each phase of the historical accounting process. Interior's Plan includes an appendix containing a brief description of five categories of quality control checks: (1) a basic approach to quality, (2) an overall quality check process, (3) record collection / record imaging, (4) accounting results, and (5) information systems. Id. at app. C. Interior's Plan does not include a cost estimate of these checks.

B. Adequacies and Deficiencies of Interior's Accounting Plan

1. The Collection Process

Plaintiffs have challenged Interior's Accounting Plan, alleging that the extant IIM trust records are insufficient to form the basis of an accounting. The Court must therefore examine Interior's representations as to the state of existing records to determine whether, in fact, such records will suffice as the foundation for an accounting.

a. The Availability of Adequate Records

As noted above, Interior's Office of Trust Records (OTR) has estimated that the federal government presently holds approximately 195,000 boxes or containers of Indian trust records. The estimated breakdown of these records is as follows: 64,000 boxes or containers located in the National Archives in Washington, D.C.; 51,000 located at OTR facilities in Albuquerque; 42,000 at the Federal Records Center in Lee's Summit, Missouri; 20,000 at the General Service Administration's facility in Lanham, Maryland; and 18,000 at storage facilities maintained by the Treasury Department and the General Accounting Office.

During the Phase 1.5 trial, Interior presented the testimony of two historians who concurred with its assessment that approximately 195,000 boxes or containers of Indian trust records were held by the government.39 One historian, Dr. Edward Angel, reported that his firm "had found that documents relevant to an accounting of individual Indian moneys have been lost or destroyed." Expert Report of Edward Angel (Defs.' Ex. 60) at 45.40 But Angel testified at trial that the loss or destruction of these records does not, by itself, preclude the completion of an accounting:

Tr., Day 27, PM session (June 12, 2003) at 66:19—67:11. While acknowledging that he "[could not] speak as an accountant, and [did] not intend to speak as an accountant," Angel nevertheless testified that "we have located a great many documents that would be useful to a historical accounting." Tr., Day 29, PM session (June 17, 2003) at 31:22-23, 10:1-3.

In his expert report, Angel identified a number of different trust-related records he had found while reviewing BIA records at the National Archives in Washington, D.C., regional branches of the National Archives, and various Federal Records Centers, including

Expert Report of Edward Angel at 46. Similar types of documents were located at the Office of Trust Records facility in Albuquerque and the GSA facility in Lanham, Maryland.41 The Court would certainly have preferred it if Angel had presented some indication of the quantity of trust-related records that he had located. Nevertheless, his testimony does indicate that a significant quantity of records that would be relevant to an accounting of the IIM trust funds exist in federal government facilities.

Angel's testimony is corroborated by the testimony of Alan Newell, a professional historian with the firm of Historical Research Associates, Inc. ("HRA"), located in Missoula, Montana, which has been retained by defendants' litigation team:

Expert Report of Alan S. Newell at 14-16 (footnotes omitted) (Defs.' Ex. 141). Like Angel, Newell acknowledged the fact that "numerous gaps" exist in the state of the record, and that at times the record is "frustratingly fragmented." However, again like Angel, Newell maintains that, despite gaps in the records, he and his fellow historians have located a number of extant trust-related records.

Based on the testimony of Angel and Newell, the Court finds that Interior has demonstrated that a substantial number of IIM trust-related records are held by the federal government. It also finds, on the basis of the testimony of these two historians, that significant and substantial gaps exist in the records held by the federal government. The Court now turns to Interior's proposals to fill these gaps by obtaining trust records that are not held by the federal government.

b. Collection of Missing Trust Records from Third Parties

As noted above, Interior has identified two major potential sources of trust records —the IIM beneficiaries and third-party entities such as oil and timber companies. With respect to the beneficiaries, Interior represents that it

Interior's Accounting Plan at III-8. It will be necessary to seek the Court's permission for such a mass mailing because on December 23, 2002, the Court entered an order pursuant to Federal Rule of Civil Procedure 23(d) directing the defendants not to contact any of the plaintiffs without first obtaining leave from the Court. However, generally speaking, the Court discerns no problem with permitting Interior to generate such a mass mailing in order to obtain information from the IIM beneficiaries about trust records in their possession. The only dangers are those that are always present whenever a defendant in a class action contacts the plaintiffs —namely, that the defendant might attempt to use such contacts to obtain information that it could not obtain through ordinary discovery, or might attempt to coerce plaintiffs, outside the presence of class counsel, into compromising their claims. However, the Court's review and approval of any proposed mailing before it is sent out should be sufficient to minimize such dangers.

The next issue is Interior's requests for records from third parties. In its most recent quarterly report to the Court, Interior announced that between April and June of 2003,

Status Report to the Court Number Fourteen (Aug. 1, 2003) at 33. The Federal Register notice mentioned by Interior asserts that "[s]earching for third-party data before knowing whether these data are necessary is neither efficient nor effective. The relevance and importance of third-party data will be determined by information gaps identified. Thus, it is important to know what information gaps exist and then develop an approach to fill those gaps." Policy and Procedures for Collection of Missing Indian Trust-Related Records From Third Parties, 68 Fed.Reg. 23,756, 23,758 (May 5, 2003) ("Policy and Procedures"). The approach developed by Interior entails waiting until an information gap in trust records has been discovered, and then taking steps to attempt to fill the gap:

Id. at 23,758-23,759.

The Court is concerned that the wait-and-see approach to filling data gaps will unduly delay the completion of an adequate historical accounting. There is, after all, no question that substantial gaps in the trust records held by the federal government do, in fact, exist. As noted above, both of the professional historians proffered as expert witnesses by Interior acknowledge that numerous gaps exist in the historical record. Additionally, one historian, Alan Newell, expressed concern about waiting until gaps had been identified before attempting even to identify trust records being held by third parties:

But my question is, do you share that concern as I phrased it?

You know, ultimately how useful they are, I really don't know. I guess we just have to wait and see.

Tr., Day 31, PM session (June 18, 2003) at 95:12—96:7, 97:6-19 (testimony of Alan Newell).

The Court is also concerned that Indian trust-related records might well be "embedded in [the] general works" of third parties, such as oil or timber companies doing business on allotted lands. Certainly, if these third parties are unaware of any need to preserve these records, "over time, [they] may either be not preserved, may be destroyed, [or] may ... just not become available." The Court agrees that with Newell's assessment that Interior "need[s] to make every effort [they] can to identify these records, and to inform the parties of what is going on here so that we can preserve them."

To date, however, Interior's efforts to identify third-parties possessing trust-related records and to prevent the destruction of the records have been wanting. As for actual searches conducted of third-party facilities, Interior's efforts have been limited to a two-day search of a single facility. Specifically, Interior reports that on February 5-6, 2003, it completed a review of documents at the American Heritage Center at the University of Wyoming. Based on this two-day visit, it determined that although the center's collections "appear[] to contain some documents that may relate to IIM and/or Tribal historical accounting issues[, t]he collection is not likely to be a primary source of documents for the historical accounting effort since only a small percentage of the records appears to be directly applicable." Status Report to the Court Number Thirteen at 31 (May 1, 2003). Interior says nothing about which types of documents were found or the basis for its conclusion that "only a small percentage of the records appear[ed] to be directly applicable." More importantly, Interior says nothing about any plans to visit any other facilities, despite that fact that during the Phase 1.5 trial, one of Interior's own expert historians testified to the existence of at least one other potential archive of trust records:

Tr., Day 27, PM session (June 12, 2003), at 59:18-25 (testimony of Edward Angel). Despite this testimony, Interior has not reported that it has any plans to determine whether the Oklahoma Historical Society archives—or any other facility—contains trust-related documents. Nor has Interior reported any plans to determine whether any banks contain trust-related documents, despite the fact that one of its contractors, the National Opinion Research Center, "concur[s] with the policy that asks third parties to notify the Department of the Interior before destroying potentially relevant records—notably, small local banks in Indian Country that may have kept canceled checks for longer than the now standard seven years." Interior's Accounting Plan at D-8 to D-9. Nor does Interior's Plan include any attempt to obtain trust-related records from Tribes managing portions of the IIM trust fund pursuant to contract, compact, or cooperative agreement. See B.2(7), infra.

Interior also reports that over a year ago, one of its contractors "completed a pilot study to search and identify oil and gas records on allotted lands and submitted a report with its findings." Department of the Interior Fiduciary Obligations Compliance Plan at 74 (Defs.' Ex. 1). But although this study allegedly "successfully demonstrated a methodology for collecting records from third parties, particularly oil and gas companies," the only action reported by Interior in response consists of a presentation to a petroleum industries conference "asking for assistance in identifying potential sources of relevant records within the oil and gas industry." Id. at 74, 75.

It is true that, apart from actual searches, Interior has taken some indirect steps to attempt to locate potential sources of trust records. On February 6, 2002, Interior published a Federal Register notice "requesting that anyone who possesses records related to the Individual Indian Money (IIM) trust funds to notify the Department, and to preserve and maintain such records indefinitely until further notice." Office of Historical Trust Accounting; Historical Accounting of Individual Indian Money Accounts; Collection of Documents Related to Oil and Gas Production on Allotted Lands, 67 Fed.Reg. 5607 (Feb. 6, 2002). However, as the Court noted during Newell's examination, nothing in the title of the notice would have put any entity except oil and gas producers that Interior was requesting any action:

Tr., Day 31, PM session (June 18, 2003), at 51:8-24 (testimony of Alan Newell). Since the filing of the notice, a year and a half ago, only three companies have contacted Interior to report that they might possess Indian trust-related data. See Department of the Interior Fiduciary Obligations Compliance Plan at 74. Interior has only managed to inspect the records of one of these companies; as for the other two, it reports only that it is "in discussions" with them. Id.

More importantly, however, the notice merely "request[s]" any third party possessing trust-related documents "to notify the Department, and to preserve and maintain such records indefinitely until further notice." This makes the preservation of trust records in the possession of third parties contingent upon the good will of those third parties not only to preserve them but to incur maintenance and storage costs until some time in the indefinite future when Interior might request them. Questioning among similar lines evoked the following response from Newell:

Id. at 92:6-17 (testimony of Alan Newell).

Certainly, there is nothing that the Court knows of that would prevent third parties from destroying trust-related records. But Interior has taken no steps to prevent such destruction. Following the publication of the February 6, 2002 notice, Interior did distribute a letter to "approximately 4,200 addresses derived from the Oil and Gas Journal subscription list" asking the recipients if they possessed trust-related records. Policy and Procedures, 68 Fed.Reg. at 23,757. Again, however, the letter merely "requested that the company preserve and maintain these documents [and] asked for a copy of the company's records retention policy." Id.

Interior's fiduciary responsibilities to the IIM beneficiaries requires more than this. In its 1999 opinion, this Court stated: "Making the two (correct) assumptions for the moment that defendants owe plaintiffs an accurate accounting and that defendants are missing a share of necessary documents to reach that end, then it follows that defendants must retrieve documents from outside sources, also referred to as third-party documents." Cobell V, 91 F.Supp.2d at 16. Having stressed the need to retrieve third-party records, the Court concluded that Interior possessed a duty "to establish written policies and procedures for collecting from outside sources missing information necessary to render an accurate accounting of the IIM trust." Id. at 58. Although the D.C. Circuit expressed some disagreement as to this conclusion, it nevertheless explained that

Cobell VI, 240 F.3d at 1105 (emphasis added).

The Court does not mean to disparage the efforts that Interior has taken. But its duties as a trustee require more. Interior's duty to "recover missing records where possible" necessarily entails taking reasonable steps to ensure that those missing records are not destroyed. Placing full reliance on the good graces of third parties not to destroy those records, while simultaneously refusing to incur any of the cost of maintaining or storing those records (or even to indicate any end date past which Interior no longer intends to request such records) is not reasonable. Moreover, the failure to take such steps risks inflicting irreparable harm upon plaintiffs, in that it subjects third-party trust records —which might well constitute the sole extant documentation that could fill gaps in the record maintained by the government —to an unreasonable risk of destruction or deterioration.

Therefore, the Court concludes that the omission of reasonable measures to ensure the preservation of trust-related records in the possession of third parties from Interior's Plan renders it a Plan that would necessarily delay rather than accelerate the ultimate provision of an adequate accounting of the IIM trust fund. As stated in the companion opinion issued this date, Interior's fiduciary duty to keep and render accounts includes the duty to retain records that are necessary to the performance of an accounting. The loss of such necessary records—the "gaps" in the records maintained by the government—renders it necessary for Interior to take all reasonable steps to reconstruct such records, and to ensure that no further destruction of records possessed by third parties occurs. Accordingly, the Court will direct Interior to submit a plan to determine which trust-related records are likely to be possessed by third parties, to identify the records maintained by those parties, and to issue subpoenas, where appropriate, to ensure that such records will be preserved.42

c. Indexing of Trust Records and Compilation of Transaction Histories

As noted above, Interior has estimated that various federal facilities hold approximately 195,000 boxes or containers of Indian trust records. However, it notes, "the inventories and indexes of these records, essential to locating needed records effectively and efficiently, are not consistently detailed and accurate for this purpose." Interior's Accounting Plan at app. E-2. In order to create such an index, Interior reports that after trust-related records have been located, they will be "electronically imaged and coded," permitting the accounting firms it has engaged "to quickly access the images needed." Id. at III-8. Specifically, Interior explains:

Id. at apps. E-2, E-3. Interior also reports that the electronic database it describes "will be created by entering data on the contents of each box in the collection onto a data-entry screen that will be integrated into a database for access by the users. Information in the database can then be sorted and indexed for easy access by document types, dates, collections, agency, etc." Id. at app. E-2. Although it is not perfectly clear,43 it appears to the Court that the proposed electronic database will function similar to the Virtual Ledger created by the accounting firm of Ernst & Young, which was demonstrated during the Phase 1.5 trial. The Virtual Ledger is an electronic database of IIM trust transactions for the five named plaintiffs in this action and twenty of their predecessors-in-interest.44

In January or February of 2001, Interior retained the accounting firm of Ernst & Young ("E & Y") to "create a listing of transactions for each of the [twenty-five past and present beneficiaries], to then compare the transactions to the document database to try to find supporting evidence that those transactions occurred, and then also to try to identify whether or not there were any missing transactions." Tr., Day 24, AM session (June 9, 2003), at 56:1-6 (testimony of Joseph Rosenbaum). Specifically, Interior provided E & Y with a database of electronically-imaged versions of trust documents related to the five named plaintiffs and their predecessors, together with an index of the documents and some initial ownership information from Interior's computer systems. Id. at 55:9-16, 19-21. According to one of the accountants who worked on the Virtual Ledger, Joseph Rosenbaum, the documents provided consisted of "accounting type information, which would include ledgers, statements of account, journal vouchers, those sorts of things, transactional documents like bills for collection, checks and the like, and also contractual information like leases, for example." Id. at 55:2-6.45

Between February of 2001 and March of 2002, "somewhere between twelve and fifteen" individuals worked on this project.46 During the Phase 1.5 trial, Rosenbaum presented the findings that the E & Y team had arrived at:

Id. at 56:15—57:7. The Court admits to some degree of skepticism as to the results of the project undertaken by E & Y, given that "[a]ll information provided by Interior and Justice was accepted as accurate, and was not independently verified, except where noted. This includes the contents of the document collection, the IIM account ledgers and statements, the ownership information, and all other data provided as part of this engagement." Expert Report of Joseph R. Rosenbaum at 10. Additionally, certain documentation, such as ledgers maintained by government superintendents of Indians, should be viewed with considerable skepticism, given past reports indicating that such superintendents "cooked the books" to hide the fact that they were defrauding the Indians they were supposed to have been "supervising."

But these factors should not be permitted to overshadow the primary issue, namely, whether the completion of the Virtual Ledger provides the Court with evidence that, in fact, Interior will be able to produce an index of trust-related documents adequate to support an accounting. Keeping in mind the above qualifications, the Court nevertheless concludes that the completion of the Virtual Ledger does provide such evidence.

During the Phase 1.5 trial, Rosenbaum demonstrated to the Court how the Virtual Ledger works. Simply put, the Virtual Ledger software divides a computer screen into three sections: Ledger Pages, Transactions, and Supporting Documents. Each section, in turn, consists of a series of rows. Each row in the Ledger Pages section represents an individual page in the original paper ledger maintained by Interior. Each row in the Transactions section represents an individual transaction, such as a collection or disbursement of funds. Finally, each row in the Supporting Documents section represents a digital image of a document that provides evidence that an individual transaction, in fact, took place.

When a user inputs an IIM account number and a given time period into the Virtual Ledger, it retrieves information related to that account and time period, and organizes that information in the three sections. Each row in the Ledger Pages section thus contains a number representing each individual page of the original paper ledger containing transactions within the selected IIM account, and for the selected time period. Each row in the Transactions section, in turn, represents each individual transaction (within that account, for the given time period) recorded in the original paper ledger. Specifically, each row lists the date of each individual transaction, a brief description of the type of transaction, the amount of the transaction, and the resulting balance after the transaction was credited to the IIM account. Finally, each row in the Supporting Documents section contains a date and description of a document evidencing one or more of the transactions listed in the Transactions section.

The three sections function as an index to the trust-related documents contained in the Virtual Ledger. For example, assume that the user has inputted an IIM account number and a given time period, and has retrieved the information listed above. If, while in the Ledger Pages section, the user selects the first page listed, the Transactions section will display all transactions contained on that page relating to that account, within that time period. For each transaction listed in the Transactions section, the Supporting Documents section will list documents supporting those transactions. Additionally, the Ledger Pages and Supporting Documents sections contain hyperlinks to each of the documents represented in their rows. In other words, each ledger page listed in the Ledger Pages section contains a link to a digital image of the actual page, and each supporting document listed in the Supporting Documents section contains a link to a digital image of the actual supporting document.47

Using the Virtual Ledger, the E & Y team was able to index documents supporting 12,617 transactions from thirty-seven IIM accounts, representing twenty-five beneficiaries. Expert Report of Joseph R. Rosenbaum at 2, 5. As noted above, Rosenbaum testified that this work was completed within a year by twelve to fifteen individuals. It is true that Rosenbaum was not able to provide a precise cost estimate of constructing the Virtual Ledger or a precise estimate of how much time it would take to index, for example, documents relating to a thousand accounts, instead of thirty-seven.48 Nevertheless, the Court finds that Interior has presented sufficient evidence to demonstrate that it will be able to establish, within a reasonable time period, an adequate index for the approximately 195,000 boxes of trust-related documents held by the federal government.49

What troubles the Court, however, is that Interior has presented no plan to index documents other than those held at the Albuquerque and Lee's Summit facilities. Although it observes that all 195,000 boxes of records are "vital to conducting a historical accounting directed by the Court" in this case, only about 93,000 boxes are located in these two facilities, representing approximately 47% of the total number of boxes. During the Phase 1.5 trial, defense counsel informed the Court:

Tr., Day 44, PM session (July 8, 2003), at 6:8-22.50

The Court appreciates defense counsel's clarification of this issue. The difficulty, however, is that without knowing whether the remaining 102,000 boxes will be indexed in the same manner as the boxes located in Albuquerque and Lee's Summit, it is impossible to evaluate the Plan presented by Interior. Even assuming that they will be indexed in the same manner, the fact that contracts have not yet been made to provide for such indexing makes it impossible to determine a time frame for the completion of the collection phase of the accounting process. Performing a proper indexing of all trust-related records held by the federal government is not only an essential preliminary step before undertaking the accounting process proper; it is also a necessary step in determining which records are missing and must be sought from third parties. Accordingly, the Court cannot properly evaluate Interior's accounting plan without some understanding as to when it anticipates that all trust records held by the federal government will be indexed. The Court will therefore direct Interior to submit a timetable for the completion of the entire indexing process, as well as an explanation of whether the indexing methods proposed in its accounting plan for indexing the Albuquerque and Lee's Summit records will also be applied to the remaining 102,000 boxes of records.

2. The Accounting Process

a. Introduction

As explained above, Interior's Accounting Plan proposes different methods for treating each of the three types of accounts within the IIM trust fund: land-based accounts, special deposit accounts (SDAs), and judgment and per capita accounts. The Court will therefore separately analyze Interior's proposed methods for treating each of these accounts. Following this analysis, the Court will examine the methods proposed to verify the accuracy of each transaction in each type of account.

b. Special Deposit Accounts (SDAs)

Unlike the other types of accounts in the IIM trust fund, special deposit accounts, or SDAs, were never intended to be permanent accounts. Instead, Interior explains, they were

Interior's Accounting Plan at III-15.51 Interior has thus explained that the goal underlying its treatment of the SDAs differs from its treatment of the other types of funds, "in that the end result is to properly distribute the funds remaining in the inactive SDAs and close the accounts," rather than the preparation of statements of account for IIM beneficiaries. Id.52 Accordingly, the process of dealing with the funds is more accurately designated a "cleanup project" rather than an accounting.

The amount of money held in the SDAs is not insubstantial. As of December 31, 2000, Interior estimates that 21,5000 inactive SDAs were held within the IIM trust fund, containing almost $68 million. Id. at III-16. This number represents approximately 16% of the total value of the IIM trust fund. Interior's Accounting Plan represents that the Office of Historical Trust Accounting (OHTA) will work with BIA and with the Office of the Special Trustee (OST) to distribute funds held in inactive SDAs that were opened on or before December 31, 2000 to their rightful owners. Id. Its Plan also describes the planned "cleanup process" for the SDAs:

Id. at III-17.

Interior reports that, working with the accounting firm of Chavarria, Dunne & Lamey, BIA and OST have identified the proper owners of funds within SDAs totaling approximately $22 million. Id. at III-16. Additionally, in its most recent quarterly report to the Court, it stated that it had closed sixty-five SDAs in the Alaska Region, and expected to close the three remaining SDAs in the region by the end of September 2003. Interior represents the total value of all sixty-eight accounts to be approximately $800,000. Status Report to the Court Number Fourteen (Aug. 1, 2003) at 36.

Interior expects to complete the cleanup process for all 21,500 inactive SDAs opened on or before December 31, 2000 by the early part of fiscal year 2007 (which ends on September 30, 2007). The estimated cost of the entire cleanup process is $27 million, a figure arrived at "based on the number of accounts, value of accounts, and difficulty of analyzing accounts." Interior's Accounting Plan at III-17.

The Court concludes that Interior's proposed cleanup process represents a reasonable approach to distributing the funds in the special deposit accounts to their rightful owners, except for the limitation of the cleanup process to accounts opened on or before December 31, 2000. Interior's Comprehensive Trust Management Plan does not provide any specific explanation of measures it will take to clean up SDAs opened after December 31, 2000. Accordingly, until Interior has demonstrated to this Court that it will take specific measures within a prescribed time period to clean up SDAs opened after that date, it will not be appropriate to designate December 31, 2000, or any other date, as a cutoff date for the cleanup process. Additionally, as explained infra in section IV(C), the Court's approval of this portion of Interior's Plan does not mean that the Court is bound to approve the ultimate accounting provided in accordance with this portion of the Plan. Instead, as explained above, the Court's approval is limited to the portion of the Plan itself; after the accounting has taken place, and any objections are made, final judicial review of the accounting will be available in the Phase II trial.

c. Judgment and Per Capita Accounts

Interior describes the judgment and per capita accounts in the IIM fund as follows:

Id. at III-2. As noted above, these two types of accounts are referred to by the parties as "low-hanging fruit" because the fact that groups of these funds are frequently established from a common source, and have an identical initial balance, make them relatively easy to perform an accounting for. The IIM trust fund contains 33,205 judgment accounts, with a combined value of $80.8 million, representing approximately 19% of the total value of the entire fund. The trust fund also contains 9013 per capita accounts, with a combined value of $69.5 million, representing approximately 17% of the total value of the entire fund.

The method of verifying each transaction within the judgment and per capita accounts is discussed below. In its Plan, Interior represents that accounting statements for approximately 13,000 judgment accounts "will soon be completed." Id. at III-4. As for the remaining judgment and per capita accounts, Interior represents that its accounting for approximately 13,000 of both types of account will be completed in fiscal year 2003 (which ends on September 30, 2003) and that its accounting for all remaining judgment and per capita accounts will be completed in fiscal year 2004 (which ends on September 30, 2004). Interior estimates that this portion of the accounting will cost approximately $2.5 million. Id.

The Court concludes that Interior's proposed accounting process for the judgment and per capita accounts represents a reasonable accounting process. As explained above in section IV(C), however, the Court's approval of this portion of Interior's Plan does not mean that the Court is bound to approve the ultimate accounting provided in accordance with this portion of the Plan. Rather, the Court's approval is limited to the portion of the Plan itself; after the accounting has taken place, and any objections are made, final judicial review of the accounting will be available in the Phase II trial.

d. Land-Based Accounts

Land-based accounts are accounts within the IIM trust fund belonging to individual Indians who possess ownership interests in some portion of the 11 million acres of land held in trust by the United States for their benefit. Revenues from activities associated with these lands are supposed to be distributed to the Indians who possess ownership interests in them by means of these accounts. The primary sources of revenue from activities associated with these lands include "surface leases from farming and grazing, sale of timber, sub-surface leases (e.g., mining, oil and gas exploration and production), and rights-of-way for roads, power lines, and other utilities." Id. at III-4 to III-5.

Land-based accounts are the most numerous accounts in the IIM trust fund. Interior has estimated that as of December 31, 2000, the trust fund contained approximately 194,000 land-based accounts containing an aggregate balance of about $198 million, or about 48% of the total aggregate balance. The relationship between the number of accounts and the number of individual Indian beneficiaries of the trust fund is difficult to unravel. One of the primary reasons for this difficulty is the problem of fractionated interests in allotted lands, explained infra at B.2.d(7). Another difficulty with accounting for land-based accounts is the state of the records that record the transactions within the land-based accounts. The Interior Department only began utilizing computer systems to record these transactions in approximately 1985, the beginning of the "Electronic Records Era." Before this date, in the "Paper Records Era," records of transactions are located only in paper-based documents: e.g., books, ledgers, or even cards. Id. As Interior explains,

Id.

In short, the land-based accounts are the most difficult to perform an adequate accounting of. It therefore comes as no surprise that Interior has attempted to place stringent limits upon its duties to account for the land-based accounts. The Court will analyze each of these proposed limits to determine whether they accord with Interior's duty to account to the IIM beneficiaries.

(1) Proposed Termination Date of the Accounting

Interior's Accounting Plan does not state that it intends to include all accounts within its accounting, only "IIM accounts that were open as of December 31, 2000, and all IIM accounts that were open as of October 25, 1994, or opened thereafter, but closed as of December 31, 2000." Id. at III-1. In other words, no accounts that were closed on October 24, 1994 or before will be included in the proposed accounting. Presumably, this limitation applies not only to land-based accounts, but also to special deposit accounts, judgment accounts, and per capita accounts.

Interior argues that this chronological limitation on the scope of its duty to account is provided in the 1994 Act. Specifically, it points to the provision of the 1994 Act mandating that the Interior Secretary "account for the daily and annual balance of all funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian which are deposited or invested pursuant to" the Indian Reorganization Act of 1938. 25 U.S.C. § 4011(a). Interior asserts that this provision of the Act

Defs.' Prop. Findings and Conclusions at 133-34 (citation omitted).

Interior's retroactivity argument is easily dispensed with. An intent to include IIM accounts predating the passage of the 1994 Act within the scope of the historical accounting is manifestly not the same as directing that the 1994 Act be applied retroactively. Rather, the cited provision consists of a prospective command to the Secretary of the Interior: account for the daily and annual balance of all funds held in trust by the United States for the benefit of an individual Indian that were deposited or invested pursuant to the 1938 Act. The fact that, in the performance of such an accounting, the Interior Secretary must consider funds deposited in the past does not change this provision into one that applies retroactively.

When its purported grounding in the retroactivity doctrine is thus removed, Interior's argument comes down to this: by employing the present rather than the past tense in the verbs that it used in the 1994 Act, Congress meant to say: "Notwithstanding any other portion of the present Act, Interior possesses no duty to account for any accounts within the IIM trust fund that closed on or before October 24, 1994." The Court cannot recall any case involving statutory interpretation in which so much purportedly hinged on the question of verb tense. It is extremely difficult, to say the least, to believe that Congress intended, merely through its choice of grammatical construction, to circumscribe Interior's duty to account.53

Even if the language were ambiguous (which it is not), the Court would nevertheless conclude that the better interpretation would be the one expanding, not contracting, the government's duties. This is in accord with the mandate of the D.C. Circuit:

Cobell VI, 240 F.3d at 1102-03 (internal citations and quotation marks omitted). Immediately preceding this passage, the D.C. Circuit issued its binding interpretation of the very portion of the statute at issue here:

Id. at 1102 (emphasis in original).

In short, if emphasis should be placed on any individual word in the statutory provision at issue, it is properly placed on the word "all," not the word "are." Therefore, the Court concludes that Interior is required by the 1994 Act to account for all funds held in trust by the United States for the benefit of an individual Indian which were deposited or invested pursuant to the Indian Reorganization Act of 1938, regardless of whether they were deposited or invested before or after October 25, 1994.54 Cf. American Indians Residing on Maricopa-Ak Chin Reservation v. United States, 229 Ct.Cl. 167, 667 F.2d 980, 1004 (1981) ("Ak Chin") (reporting the ruling of the Indian Claims Commission requiring the government to perform an accounting that "[i]dentifies all IIM accounts opened in the name of the plaintiffs ... together with the opening and closing date of each such account," the opening balance, and all withdrawals). The Court further concludes that by omitting such a requirement, Interior's Plan will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund.55

(2) Proposed Start Date of the Accounting

Interior also asserts that it possesses no duty to account for any funds in the IIM trust fund that were deposited or invested before the passage of the Indian Reorganization Act on June 24, 1938. Accordingly, its Accounting Plan explains that its proposed accounting will provide only "a history of all transactions in [IIM beneficiaries'] accounts back to the inception of their accounts or to the passage of the Act of June 24, 1938, whichever is later." Interior's Accounting Plan at II-2. In short, Interior's proposed accounting will not include any transactions occurring between the commencement of the allotment process in 1887 and June 23, 1938. This proposed restriction is based on a sentence from the passage from the D.C. Circuit's 2001 opinion just quoted: "`All funds' means all funds, irrespective of when they were deposited (or at least so long as they were deposited after the Act of June 24, 1938)."

But the sentences immediately preceding the quoted sentence make clear that the D.C. Circuit was referring only to Interior's obligations under section 102 of the 1994 Act, not to the full scope of Interior's fiduciary obligation to account. It is impossible to reconcile the argument that the D.C. Circuit only recognized a duty to account for funds deposited after June 24, 1938 with its clear holding that Interior's duty to account is not bounded by the provisions of the 1994 Act:

Id. at 1098. The D.C. Circuit went on to explain:

Id. at 1100. And in the context of Interior's duty to account, the D.C. Circuit declared: "Not only does the 1994 Act plainly reaffirm the government's preexisting duty to provide an accounting to IIM trust beneficiaries, but it is plain that such an obligation inheres in the trust relationship itself. The obligation of a trustee to provide an accounting is a fundamental principle governing the subject of trust administration." Id. at 1103 (emphasis added) (citations and internal quotation marks omitted).

If Interior's obligation to account inheres in the trust relationship itself, then its obligation to account arose at the very moment that the trust relationship was created. Accordingly, its duty to account is not satisfied until it has performed an adequate accounting for all funds deposited in the IIM trust fund, regardless of whether they were deposited in 1887, 1938, 1994, or 2003. The 1994 Act did not place any limitation on this pre-existing duty to account to IIM beneficiaries whose funds were being held for their benefit. See id. at 1104 ("In 1996 (prior to the filing of the initial complaint in this case) the Interior Department's Solicitor issued an opinion that government trustees have an `affirmative duty ... to make a full and proper accounting.' Nothing in the 1994 Act, nor any other federal statute, acts to limit or alter this right.") (emphasis added); Ak Chin, 667 F.2d at 1003 (requiring the United States to perform an accounting of IIM funds "extend[ing] from the earliest date any such fund existed" until the cutoff date of the court's jurisdiction).

The Court therefore concludes that, because Interior possesses both a statutory duty to account for all funds deposited or invested in the IIM trust fund pursuant to the Indian Reorganization Act of 1938, and a fiduciary duty to account that predates the passage of the 1994 Act, Interior must perform an accounting of all funds deposited or invested in the IIM trust fund since the passage of the General Allotment Act in 1887. The Court further concludes that the failure of Interior's Plan to recognize the full consequences of its duty to account renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund.

(3) Deceased Beneficiaries

Interior's Plan also "does not contemplate performing historical accounting work for the closed accounts of deceased predecessors of current IIM account holders." Interior's Accounting Plan at II-3. Its Plan discusses its rationale for this exclusion:

Id. at II-3 to II-4 (footnote omitted).

This explanation conflates two issues— whether Interior may treat the results of an Indian probate proceeding as presumptively valid, and whether Interior must account for transactions occurring in the accounts of deceased IIM beneficiaries. The Court will analyze these two issues separately.

28 U.S.C. § 372 provides, in relevant part:

Section 373 establishes similar procedures for determining the validity of a will issued by an IIM beneficiary. Interior has published regulations governing the direct review of probate proceedings involving IIM beneficiaries. See generally 25 C.F.R., pt. 15. Once a person has exhausted the administrative remedies provided for appeals of an heirship determination or will contest involving an IIM beneficiary, he or she may seek review in federal district court. The federal courts also possess jurisdiction to entertain claims that an Indian probate proceeding violated the Constitution, which is not subject to an exhaustion requirement. Anderson v. Babbitt, 230 F.3d 1158, 1162 (9th Cir.2000).

Thus, the federal courts may review challenges to an Indian probate proceeding in one of two ways: (1) on direct appeal, after all administrative remedies have been exhausted or (2) on a collateral challenge to the constitutionality of the proceeding. Apart from these two avenues, the federal courts may not review the validity of such proceedings. Inasmuch as such proceedings are foreclosed from review by the federal courts, unless one of these two requirements is satisfied, the Court concludes that it is appropriate for Interior to treat the final determination made in such proceedings as presumptively valid.

However, it does not follow from the fact that Interior may presume final determinations in Indian probate proceedings to be valid that Interior is thereby not required to account for any transactions in deceased beneficiaries' IIM accounts. A simple example will illustrate why the conclusion does not follow from the stated premise. Suppose Beneficiary X died intestate in 1990. Following an heirship proceeding conducted by Interior, X's property was divided equally among four persons determined to be X's heirs, all IIM beneficiaries, who are still living. Now suppose that during X's life, X never received $500 that was supposed to have been disbursed to him from the IIM trust fund, and that the available records make clear that X never received this sum.

In such an instance, it would be appropriate for Interior to treat the heirship proceeding as presumptively valid, and to conclude that the four persons designated as X's heirs were entitled to equal portions of X's property upon his death. But if the transactions occurring in X's account during X's life were to be excluded from Interior's proposed accounting, X's heirs would not receive the $500 to which they are entitled, in equal portions, as X's heirs. In other words, if these transactions were to be excluded from Interior's proposed accounting, then X's heirs—who are living IIM beneficiaries—would never discover that the balances of their respective trust accounts are $125 lower than they presently should be.

Plainly, then, no adequate historical accounting can exclude transactions that occurred during the life of IIM beneficiaries who are now deceased. The Court has already concluded that Interior's historical accounting must account for all funds within the IIM trust since the date of inception of the trust. Consistent with this conclusion, the Court also concludes that Interior must include in its historical accounting all transactions that occurred during the lives of IIM beneficiaries who are now deceased. The Court further concludes that the failure of Interior's Plan to include such transactions renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund.

(4) Assets

Interior's Plan also excludes from its accounting any assets held by the IIM trust, as opposed to funds within the trust. It is true that section 102 of the 1994 Act mandates only that "[t]he Secretary shall account for the daily and annual balance of all funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian which are deposited or invested pursuant to section 162a of this title." 25 U.S.C. § 4011(a). However, as explained above, both this Court and the D.C. Circuit have determined that the scope of Interior's duty to account is not limited by the terms of the 1994 Act. Additionally, in its 2001 opinion, the D.C. Circuit explained:

Cobell VI, 240 F.3d at 1103. Inasmuch as black-letter trust law mandates that an accounting include a full disclosure and description of each item of property constituting the corpus of the trust at its inception, Interior's historical accounting must include such a full disclosure and description. See Ak Chin, 667 F.2d at 1003 ("The Government has no obligation to administer Indian assets (other than money) for profit, but if it has undertaken so to do, it must account. Where the Government has used reservation land itself, or permitted third parties such use, or has permitted trust assets to be exploited for nontrust purposes, accounting is required.").57

Interior argues, however, that the corpus of the trust consists only of funds, not of the allotted lands themselves:

Defs.' Prop. Findings and Conclusions at 121 (emphasis in original). Interior cites no case law for its curious proposition that the law of trusts draws a distinction between the "corpus" and "assets" or a trust, nor for its statement that the IIM trust contains only "funds" but not "assets." Indeed, the available case law supports the converse of both propositions.58 Additionally, neither the Restatement of Trusts nor Bogert on Trusts provides support for either proposition.59

This should not be surprising, because Interior's statements represent a misapplication of the law of trusts. The allotted lands themselves are the "trust corpus" or "trust assets" or "trust property," which are held in trust by the United States. Not only does the IIM trust contain these lands, they are an indispensable element of the trust. These lands generate income, which Interior (as trustee-delegate) must distribute to the IIM beneficiaries. The IIM accounts are the means by which this income is distributed to the beneficiaries. In short, the monies deposited into the IIM accounts represent the income generated by the allotted lands held in trust by the United States, not the corpus, which is made up of the lands themselves.

Therefore, Interior's argument that it has no duty to account for the assets held in trust, as opposed to the funds (income) generated from these assets, is without merit. The Court concludes that the accounting conducted by Interior must include an accounting of all assets held in the trust, from the inception of the trust in 1887 until the present. The Court further concludes that the failure of Interior's Plan to include an accounting of assets renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund.

(5) Direct Pay

Another issue that received considerable attention during the Phase 1.5 trial was the issue of direct-pay leases and contracts. During his direct examination, historian Edward Angel provided a useful brief description of the concept:

Tr., Day 27, PM session (June 12, 2003) at 24:13—25:11.

Yale law professor John Langbein defined the concept of direct pay as the "ability on the part of beneficiaries of certain of the land interests to, in effect, withdraw the trust assets from the direct management of the trustee, and have the beneficiary do its own leasing or other management decisions with respect to the trust property." Tr., Day 19, PM session (June 2, 2003), at 72:22—73:2. Professor Langbein observed that "what is so special [about the IIM trust] as I understand it is that the [withdrawn] asset continues to be treated as a part of the trust corpus, and some level of trustee duties will apply, [n]otwithstanding that it has escaped the management control of the fiduciary." Id. at 73:13-17.

Indeed, a 1965 opinion issued by Interior's Office of the Solicitor affirms that "[i]t is settled beyond debate, of course, that the direct income from a trust allotment partakes of the character of the corpus of the allotment itself and is subject to all the authorities and responsibilities of the trust undertaking relating to the allotment itself." Lease of Restricted Land—Federal Supervision Over Rentals Payable Directly to Lessor, 72 Interior Dec. 83 (Feb. 17, 1965), available at 1965 WL 12755 (citing Squire v. Capoeman, 351 U.S. 1, 76 S.Ct. 611, 100 L.Ed. 883 (1956)). A 1960 opinion from the same office made clear that Interior possessed a duty to verify the accuracy of a lessee's payments made under a direct-pay lease:

Regulation Authorizing Lessees of Allotted Indian Land to Pay Rental and Royalty Directly to the Indian Owner (Nov. 1, 1960), available at 1960 WL 12652 (Pls.' Ex. 251) (internal citations omitted).

Additionally, the Federal Circuit in Brown v. United States, 86 F.3d 1554 (Fed.Cir.1996), held that the Interior Department acts as a fiduciary to allottees with respect to commercial leases. The plaintiffs in Brown were allottees who had collectively entered into a direct-pay lease for the use of their land as a commercial golf course pursuant to 25 U.S.C. § 415(a), which provides in relevant part:

Although the Court of Federal Claims subsequently dismissed the plaintiffs' action for breach of fiduciary duties against Interior, the Federal Circuit reversed. It acknowledged that "the Secretary lack[ed] ongoing management responsibility over the day-to-day administration of commercial leases concerning allotted lands," but nevertheless determined that Interior possessed an enforceable fiduciary duty with respect to such commercial leases under the "control" portion of the "control or supervision" test created in Mitchell II, 463 U.S. 206, 225, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). Specifically, the court explained:

Brown, 86 F.3d at 1561-62 (emphasis in original) (internal citations omitted). Accordingly, the court concluded that "by virtue of the control they place in the hands of the Secretary, section 415(a) and the implementing regulations of part 162 impose upon the government a fiduciary duty in the commercial leasing context." Id. at 1563.

To his credit, during his Phase 1.5 trial testimony, Associate Interior Deputy Secretary Cason did not attempt to sidestep the fiduciary responsibilities that Interior owes to IIM beneficiaries with respect to direct-pay leases:

Tr., Day 21, PM session (June 4, 2003), at 29:1-4. Cason also noted his understanding that the United States bears responsibility for enforcing direct-pay leases. Id. at 27:20-23. Indeed, the available case law demonstrates that on at least one occasion, the United States has canceled a direct-pay lease and brought a damages action against the lessee. See Montana Eastern Ltd. v. United States, 95 F.2d 897, 899 (9th Cir.1938) ("Appellant contends that since the United States was not a party to the leases, and had no interest in the rents and royalties, it was not entitled to bring the action, because it was not the real party in interest. We think that the United States properly brought the action.").

In sum, Interior's Solicitor has concluded that "the direct income from a trust allotment partakes of the character of the corpus of the allotment itself and is subject to all the authorities and responsibilities of the trust undertaking relating to the allotment itself" and that Interior possesses a duty to verify the accuracy of a direct-pay lessee's rental and royalty payments; the Federal Circuit has held that Interior possesses a fiduciary duty to Indian beneficiaries with respect to commercial leases, including direct-pay commercial leases; and both the present Interior Associate Deputy Secretary and available case law agree that the United States bears responsibility to enforce direct-pay leases. The Court therefore concludes that Interior's fiduciary duty to account, which predates the 1994 Act, mandates that any adequate historical accounting of the IIM trust must include an accounting of all monies paid to IIM beneficiaries in conjunction with direct-pay leases and contracts. The Court further concludes that the failure of Interior's Plan to include an accounting of such monies renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund.

(6) Contract / Compact / Cooperative Agreement

The Indian Self-Determination Act and Education Assistance Act of 1975, Pub.L. No. 93-638, 88 Stat. 2203, as amended, "creates a mechanism for the transfer to Indian tribes of programs previously carried out by the Bureau of Indian Affairs ... or by other agencies within the Department of the Interior." Memorandum from John D. Leshy, Office of the Solicitor to Ken Rossman, Director, Office of Trust Litigation Support and Records 2 (Nov. 28, 2000) (Pls.' Ex. 259). These programs include the management or administration, at a local level, of certain aspects of IIM trust management. However, "the fact that a tribe takes over federal duties by entering into one or more contracts or a compacting program does not extinguish the federal trust responsibility." Id. at 3. Indeed, Interior's Office of the Solicitor has acknowledged that the 1994 Act

Id. at 5 (footnote omitted). When this portion of the 2000 memorandum was read into the record during the Phase 1.5 trial, Associate Deputy Secretary Cason affirmed that it was "consistent with [his] understanding." Tr., Day 22, PM session (June 5, 2003) at 52:12-14.60 Indeed, nothing in Interior's Accounting Plan represents that its proposed historical accounting will not include IIM accounts whose assets are administered or managed by Tribes pursuant to contract, compact, or some other form of agreement. Given the above testimony, the Court concludes that Interior's historical accounting must include an accounting of IIM accounts whose assets are administered or managed by Tribes pursuant to contract, compact, or other form of agreement. The Court further concludes that the failure of Interior's Plan to specifically include an accounting of such assets renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund.

(7) Land Escheatment

In a provision of the Indian Land Consolidation Act, 96 Stat. 2519, as amended, 25 U.S.C. § 2206 ("ILCA"), Congress provided for the "escheatment," or transfer of title, to Indian tribes of certain property interests within the IIM trust fund upon the death of the owner of the property interest. To explain the relevance of the ILCA provision to the present case, it is first necessary to introduce the reader to the problem of fractionated interests in allotted lands.

In its Phase I opinion, this Court explained that

Cobell V, 91 F.Supp.2d at 17 n. 14 (internal citation omitted).

A simple example will perhaps best illustrate this difficulty. As explained above, when Indian reservation lands were parceled out to individual Indians between 1887 and 1934, heads of families were allotted land parcels of 160 acres. Thus, if a head of family for whom 160 acres of land was being held in trust died, leaving four children as his heirs, each of the four children might receive a one-quarter interest in his parcel. As such, each child would be entitled to 25% of the revenues generated from the use of that parcel. If one of the children then died, leaving four children as her heirs, each of the four children might then receive a one-quarter interest in her parcel. As such, each child (the grandchild of the head of family to whom the 160 acres was allotted) would be entitled to 1/16 (1/4 × 1/4) of the revenues generated from the use of that parcel. Thus, with the passage of two generations, the number of persons with an interest in the 160-acre parcel has increased, but the percentage of their interest diminishes in proportion to the number of generations they are removed from the original allottee of the parcel. And with the passage of almost six generations since 1887, the result has been an ever-increasing number of descendants of the original allottees, each of whom possess an ever-decreasing percentage of interest in the revenues generated from the allotted lands.

"Fractionation" is the name given to this phenomenon, namely, "the increasing partition of ownership as allotments are divided among heirs in each generation." Interior's Accounting Plan at III-5. As Interior recognizes, at present, "revenue receipts may be divided among dozens to more than 1,000 individual owners of a single allotment. Further, many IIM account holders have ownership interests in allotments in several locations, processed by different BIA agencies, the revenue from which must be examined when relevant account transactions are reconciled." Id.

In 1983, Congress attempted to address the problem of fractionation in section 207 of the ILCA, which mandated that the title of small fractionated property interests— those that constituted two percent or less of the total acreage in an allotted land tract, and that had earned less than $100 in the preceding year—would escheat, or transfer, to the Tribe that owned the allotment upon the death of the owner of the fractionated interest. However, four years later, the Supreme Court held that section 207 constituted a taking without just compensation, in violation of the Fifth Amendment. Hodel v. Irving, 481 U.S. 704, 716-18, 107 S.Ct. 2076, 95 L.Ed.2d 668 (1987). Although Congress amended the statute in 1984 to attempt to remedy the constitutional infirmity, the Supreme Court struck down the amended statute on the same grounds in 1997. Babbitt v. Youpee, 519 U.S. 234, 243-45, 117 S.Ct. 727, 136 L.Ed.2d 696 (1997). Between 1983 and 1997, however, a number of fractionated interests were transferred, upon the death of their owners, to various Tribes.

The issue for the Court to decide, then, is whether Interior must account for the interests that were transferred to Tribes during this fourteen-year period. In an April 6, 1999 filing with the Special Master, the United States explained the steps that Interior was taking in response to the two Supreme Court decisions:

United States' Statement on Predecessors in Interest for Purposes of Document Production (Pls.' Ex. 258) at 2 (internal citation omitted). Interior's Eighth, Ninth, Eleventh, and Thirteenth Quarterly Reports have included updates on this redistribution process.

Because of this ongoing process, Interior asserts that the escheated lands should not be included in its proposed accounting:

Defs.' Prop. Findings and Conclusions at 9. During closing arguments in the Phase 1.5 Trial, this Court stated that the resolution of the Irving and Youpee decisions lies outside the scope of its mandate.61 The Court adheres to that statement, with the sole caveat being, as Interior acknowledges, that if the redistribution process results in funds being deposited into an IIM account, or escheated land interests being returned to the IIM trust fund, Interior must account for those funds and those property interests. The reason is that when interests escheated to the Tribes under the ILCA, they no longer represented interests of an individual Indian in allotted lands; rather, at that point, they became Tribal interests.

Of course, if an escheated interest is returned to an IIM beneficiary pursuant to the distribution process, it once again represents a property interest by an IIM beneficiary in allotted lands, and must therefore be accounted for. But whether the interest will fall within the scope of the historical accounting or a later accounting to be performed by Interior depends on whether the interest is returned to the beneficiary by the time that Interior completes the historical accounting project. For example, if an escheated interest is restored to Beneficiary X before the completion of the historical accounting project, it must be included within the historical accounting, because it is once again a property interest maintained by an IIM beneficiary. But if an escheated interest is restored to Beneficiary Y after the historical accounting project is completed, then Interior must include an accounting for that interest in one of its subsequent accounting reports to that beneficiary, the issuance of which is mandated by the 1994 Act.

In sum, the Court concludes that Interior must include within its historical accounting project all interests that escheated pursuant to ILCA and that reverted back to IIM beneficiaries during the historical accounting process. Additionally, all interests that escheated pursuant to ILCA and that reverted back to IIM beneficiaries after the historical accounting process is completed must be accounted for in subsequent accounting reports to those beneficiaries.

e. Methods of Verification

As observed above, a proper accounting does not consist merely of a list of transactions; rather, the trustee must provide supporting documentation that is adequate to demonstrate that each listed transaction actually took place. In its Plan, Interior has proposed two methods by which it intends to verify the existence of transactions within the IIM accounts. For each transaction recorded as occurring within a special deposit account, judgment account, or per capita account, Interior intends to "reconcil[e] the amount of the recorded transaction to both supported financial documents and ownership information." Interior's Accounting Plan at III-9. Specifically, Interior has developed an Accounting Standards Manual identifying the types of documentation that will be considered adequate to verify the existence of a particular transaction.

Interior intends to employ the same reconciliation method for each transaction occurring within the land-based accounts with a value of $5000 or more. For all transactions within the land-based accounts with a value of less than $5000, however, Interior proposes to verify their existence using a statistical sampling method. Each method is analyzed separately below.

(1) Accounting Standards Manual

The version of the Accounting Standards Manual ("the Manual") filed with the Court is dated May 9, 2003. The Manual represents the result of a collaboration between five accounting firms (Chavarria, Dunne & Lamey LLC; Deloitte & Touche LLP; Ernst & Young LLP; Grant Thornton LLP; and KPMG LLP), the National Opinion Research Center at the University of Chicago, and Interior. Manual at preface (Defs.' Ex. 59). It "identifies the key documents to be used and briefly outlines the policies and procedures to be followed in performing the Historical Accounting of IIM accounts in the IIM Trust Fund." Id. at I-1. Michelle Herman, a director with the accounting firm of KPMG, LLP, testified that the Manual was developed based on information collected during the Paragraph 19 process.62 Tr., Day 23, AM session (June 6, 2003) at 17:17-24. She also testified that, although it is anticipated that the Manual will be continually revised during the accounting process, the Manual presently includes a listing of all major revenue sources for the IIM trust. Id. at 18:4-9.

The Manual contains chapters corresponding to each revenue source, and each chapter includes two sets of tables. A summary table provides a list of document types and designates each as "Level One" or "Level Two." For each document type, a detailed table is provided in the chapter containing a physical description of the document, its title and form number (if applicable), its primary data elements, and a reference to a page in the Manual appendix containing a photocopy of a sample of the document.

"Level One documents" are defined as documents that the accounting teams conducting the verification process should use first to support individual transactions. Manual at I-iv. "Level Two documents" are defined as documents that should be used to support individual transactions if no Level One documents are available.

Thus, for example, chapter 2 (Disbursements—General) begins with a summary table listing one Level One document type—negotiated checks and the equivalent documentation for electronic funds transfers—and three Level Two document types—non-negotiated checks, disbursement schedules, and supplemental disbursement documents—that may be used to verify the existence of an individual general disbursement.63 Id. at 2.0-1. Each document type, in turn, is the subject of a detailed table within the chapter describing each document contained within the document type. For example, the first row of the table for negotiated checks and the equivalent documentation for electronic funds transfers is as follows:

------------------------------------------------------------------------------------------------------
  Appendix     Form              Document                            Key Data
  Reference    Number            Title            Description        Elements       Comments
------------------------------------------------------------------------------------------------------
  2.1.1.1      Negotiated:       Negotiated:      This is a 3-part   Payee name     A manual check
                                                  heavyweight                       is not the
               Treasury Check    United States    paper check        Amount of      normal method
                                 Treasury Check   printed on         payment        under the
               Stock                              Treasury           Check          current process,
                                 15-51            stock like         number         but it is valid
               Manual             000             those                             when used.
                                                  disbursed
               3-Part                             by Treasury,
                                                  but
                                                  these are
                                                  produced
                                                  manually
                                                  within Interior.
------------------------------------------------------------------------------------------------------

Id. at 2.1-2. The "Document Title" and "Form Number" columns inform a user of the Manual that the document in question is a type of negotiated U.S. Treasury check. The "Appendix Reference" column lists the page of the Manual's appendix on which the user may find a photocopy of such a check. The "Description" and "Comments" columns provide descriptive information allowing the user to discern whether the document he or she possesses is, in fact, this type of check. Finally, the "Key Data Elements" column identifies the elements of information on the check that are most relevant to the verification process.

The Manual affords the accountants performing the verification process a significant degree of discretion. For example, its definition of Level Two documents provides that "[a]ccounting teams will need to use professional judgment to determine the sufficiency of Level Two documents for meeting the purposes of the Historical Accounting." Id. at I-iv. The Manual further provides that

Id. However, the fact that the accountants who will perform the verification process are permitted, to some degree, to rely on their professional judgment to determine whether available documents adequately support an individual transaction does not, of itself, mean that the Manual provides no meaningful constraints. It is by no means unusual for an accountant to rely upon his or her best professional judgment, rather than a fixed set of rules, at a particular juncture in the performance of an accounting.

Plaintiffs object that the types of documentation authorized by the Manual to verify individual transactions are insufficient. For example, plaintiffs imply that unless a negotiated check is located with respect to an individual disbursement, such a disbursement should not be accepted as verified. See Pls.' Proposed Findings of Fact: Defendants' Accounting Plan at 56. However, it is premature for this Court to make such a determination, which can only be made at the completion of the accounting process. For the present, it will suffice for the Court to find that a verification process conducted by professional accountants utilizing the standards outlined in the Manual may provide an adequate verification process for individual transactions. As discussed below, having conducted such a verification process, Interior will be in a position to proceed to the reporting stage of the historical accounting.

It is important to remember that although Interior's historical accounting will end with the completion of the reporting process, Interior's fiduciary duties to the beneficiaries do not thereby come to an end. Thus if, after receiving his or her accounting statement, an IIM beneficiary has questions about any individual transaction, he or she may request Interior to provide all documentation in its possession that support that transaction. In accordance with its fiduciary duty to furnish information, Interior must provide such documentation to the beneficiary upon request. If the beneficiary still believes that the transaction is not adequately supported, he or she may initiate a claim against Interior in the U.S. Court of Claims. In such an action, the burden of proof would then be upon the trustee to demonstrate that the payment was made, because all doubts are to be resolved in favor of the beneficiary. Rainbolt v. Johnson, 669 F.2d 767, 769 (D.C.Cir.1981) ("Under established principles of trust law, if the former trustee has not kept adequate accounts, the benefit of the doubt is to be given to the beneficiary. Once the accounting is completed, the District Court shall provide such additional relief for plaintiff-appellant as may be appropriate.") (citing Bogert on Trusts § 962); 2A Scott on Trusts § 172 ("If the trustee fails to keep proper accounts, all doubts will be resolved against him and not in his favor.") (footnote omitted). It is, in part, the threat of such liability that compels a trustee to maintain adequate documentation for all of its trust-related actions, and to provide an accounting that adequately reflects all of the information at the trustee's disposal.

In sum, having reviewed the Accounting Standards Manual, the Court finds that a verification process conducted by professional accountants using the representations in the Manual to verify the existence of each individual transaction occurring during the life of each individual account within the IIM trust fund may constitute an adequate process to verify the existence of such transactions. As noted above, the Court will reserve its final determination of the adequacy of this process until the accounting has been completed.

(2) Statistical Sampling

Interior does not propose to utilize the above-mentioned process to verify all transactions within the IIM accounts. Rather, for all transactions within the land-based accounts whose value is less than $5000, Interior proposes to utilize statistical sampling to verify that such transactions actually occurred. Because the adequacy of the proposed sampling process represents one of the most contested issues raised during the Phase 1.5 trial, the Court must analyze this issue in some detail, and at some length.

It is not known how many transactions were posted to land-based accounts before 1985. However, Interior reports that between 1985 and 2000, approximately 26.5 million transactions occurred in these accounts, representing over $3.3 billion of "throughput." Interior's Accounting Plan at III-12. It also reports that approximately 26.4 million of these transactions had a value of $5000 or less. Id. These transactions represent approximately $1.8 billion, or 55% of the total throughput between 1985 and 2000. Id.

Interior has divided the 1985-2000 transactions into two "strata," the first containing transactions with a value between $0 and $500, and the second containing transactions with a value between $500 and $5000. Id. It represents that it has hired a contractor, the National Opinion Research Center ("NORC") at the University of Chicago, to develop a method of conducting a statistical sampling of these two strata. Id.

"Statistical sampling is best understood as using information derived from a portion of a population to infer information on the population as a whole." U.S. House of Representatives v. U.S. Dep't of Commerce, 11 F.Supp.2d 76, 80 (D.D.C.1998), aff'd, 525 U.S. 316, 119 S.Ct. 765, 142 L.Ed.2d 797 (1999). As described by Interior, the sampling method developed by NORC involves conducting a verification of 80,000 transactions from each strata, a total of approximately 160,000 transactions. Id. As for pre-1985 transactions—which are recorded only in paper-based media, not in electronic databases—Interior reports that it intends to employ a similar method of statistical sampling after the paper-based account transaction histories are electronically imaged. Id. at III-13.

No member of NORC testified during the Phase 1.5 trial, however. Instead, the only expert witness presented by Interior to testify about the statistical sampling plan was Dr. David Lasater, an accountant at KPMG LLP. Dr. Lasater testified that he did not know why Interior had not called any member of NORC to testify during the Phase 1.5 trial:

Tr., Day 23, PM session (June 23, 2003) at 55:3-10.

In its Trial I opinion, this Court expressly declined to rule on the issue of "whether an accounting accomplished through a sampling technique will satisfy the requirements of the [1994] Act." Cobell V, 91 F.Supp.2d at 32 n. 22. However, because this issue was squarely presented in the Phase 1.5 trial, it will be necessary for the Court to resolve it.

The primary difficulty the Court has with authorizing the use of statistical sampling techniques is that although sampling may be an accepted method in audit practice, no evidence has been presented to the Court that statistical sampling has ever been considered to be an appropriate method to use in conducting an accounting. The terms "accounting" and "audit" are by no means synonymous. In an earlier opinion, this Court distinguished the two by noting that an "accounting" in the trust context represents the preparation of "a detailed report provided by a trustee for a beneficiary describing the trustee's conduct during the relevant time period, including a description of each item of property within the trust corpus, all items of property received into or disbursed from the trust, all income earned by the trust, and all expenses paid by the trust."64 Cobell v. Norton, 260 F.Supp.2d 110, 127 (D.D.C.2003). On the other hand, "[a]n `audit' is a review of accounting records conducted by a person or entity other than the person or entity who prepared the records."65 Id. at 123. Cf. RLI Ins. Co. v. Berry, Dunn, McNeil and Parker, LLC, 2003 WL 21210297 at n. 5 ("For example, the proper scope of an accounting review, as distinct from an audit, is very much in dispute.") (D.Me. May 11, 2003); Arthur Andersen v. Superior Court, 67 Cal.App.4th 1481, 79 Cal.Rptr.2d 879, 894 (distinguishing between "conduct[ing] an audit" and "participat[ing] in the preparation of ... inaccurate accounting records"). In other words, an accountant verifies a list of financial transactions by matching them with supporting documentation and producing an accounting report; an auditor reviews the work performed by the accountant to ensure that it was performed properly.

Appendix D to Interior's Accounting Plan, prepared by NORC, notes that "[s]tatistical sampling is routinely used in audit practice, as described in texts such as [DAN M. GUY, AUDIT SAMPLING: AN INTRODUCTION (1994)] and [ARTHUR J. WILBURN, PRACTICAL STATISTICAL SAMPLING FOR AUDITORS (1984)]. See also [AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, AUDIT SAMPLING (2001)]." As the titles of these texts make clear, they discuss the use of sampling in the performance of an audit, not an accounting. Nor does the appendix prepared by NORC represent that statistical sampling has ever been used in the performance of an accounting. Additionally, Interior's sole expert witness on the sampling plan acknowledged that he was unaware that statistical sampling had ever been used in the preparation of an accounting:

Tr., Day 34, PM session (June 23, 2003) at 40:3-16 (testimony of Dr. David Lasater).66

Additionally, Paul Homan, the first Special Trustee, testified that although sampling methods might be appropriate for testing internal controls systems, "[y]ou can't use sampling techniques to account for money." Tr., Day 7, AM session (May 9, 2003) at 54:14-15. Homan further explained that

Tr., Day 1, PM session (May 1, 2003) at 8:6-15.67

Interior has cited a number of cases for the proposition that the federal courts have "approved of the use of statistical sampling as a means for auditing records and establishing adjudicative facts." Defs.' Prop. Findings and Conclusions at 142. But none of these cases provide support for the use of sampling methods in the performance of an accounting, which is the issue presently before the Court.

Three of the cases cited by Interior involved challenges to sampling methods used by federal or state health officials in auditing Medicaid payment claims. In Georgia v. Califano, 446 F.Supp. 404 (N.D.Ga.1977), the U.S. Department of Health, Education and Welfare (HEW) conducted an audit of Medicaid reimbursements it had made to the Georgia Department of Human Services (DHR). The audit, which was conducted on the basis of random statistical samples of claims made by DHR, revealed that Georgia had overpaid some Medicaid claims. Extrapolating from the sample results, HEW demanded a refund of some of the reimbursements it had made to DHR. DHR filed suit under the APA, claiming that HEW's actions were arbitrary and capricious. The district court granted summary judgment for HEW, finding that HEW had utilized a "valid audit technique" in its audit of DHR's payment claims. Id. at 409. In Illinois Physicians Union v. Miller, 675 F.2d 151 (7th Cir.1982), the state department of public aid conducted an audit, involving the use of statistical sampling, of a physician participating in the state Medicaid program. Having determined that it had overpaid the physician, the state filed a claim for recoupment. The physician mounted a due process challenge to the use of statistical sampling in the performance of a Medicaid audit. Citing the Califano decision, the Seventh Circuit affirmed the district court's judgment in favor of the state. Id. at 155. Finally, in Yorktown Medical Laboratory v. Perales, 948 F.2d 84 (2d Cir.1991), a clinical laboratory mounted a due process challenge to the state's use of sampling in an audit of the laboratory's Medicaid payment claims. Citing Miller, the Second Circuit affirmed the district court's award of summary judgment to the state, finding that the sampling technique used satisfied the balancing test set forth in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).

A fourth case cited by Interior, Michigan Dep't of Education v. U.S. Dep't of Education, 875 F.2d 1196 (6th Cir.1989), involved an audit of a state department of education that had received federal funds for use in a vocational rehabilitation program. The audit, which was conducted by the Education Department's inspector general, determined that the state had made unallowable expenditures in thirteen out a random sample of 259 expenditures. Extrapolating from the sample results, the Education Department disallowed a portion of its future funding to the state program. The state filed suit, asserting that the reliance upon the sampling results was arbitrary and capricious. Citing Califano, the Sixth Circuit determined that the reduction in funding was neither arbitrary nor capricious. Id. at 1205-06.

Each of these four cases involves either a due process challenge to an administrative agency's use of sampling in the performance of an audit, or a claim that the agency's action was arbitrary and capricious. Unlike the present case, however, none of these cases involve the performance of an accounting. More importantly, in none of the cases did the agency in question possess the status of a trustee or a trustee-delegate, bestowing upon it the fiduciary duty to account. The precedential value of these cases is thus minimal, given that fiduciary standards represent a much higher threshold to satisfy than either the Mathews balancing test or the arbitrary and capricious standard.

The fifth case cited by Interior, Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996), was a class action involving 9541 claims for damages against Philippines President Ferdinand Marcos for human-rights abuses.68 The district court heard the testimony of a statistics expert, who represented that "the examination of a random sample of 137 claims would achieve a 95 percent statistical probability that the same percentage determined to be valid among the examined claims would be applicable to the totality of the claims filed." Id. at 782 (internal quotation marks omitted). Proceeding upon the expert's recommendations, the district court held a jury trial on compensatory damages for 137 claimants whose claims had been randomly selected. The jury awarded damages for 135 of the claimants, and the court utilized the expert's calculations to determine an aggregate damages award for the entire class. On appeal, the defendants mounted a due process challenge to the sampling method used by the district court. While acknowledging that defendants' due process claim "[did] raise serious questions," the Ninth Circuit affirmed, finding that the procedure adopted by the district court satisfied the balancing tests set forth in Mathews and in Connecticut v. Doehr, 501 U.S. 1, 111 S.Ct. 2105, 115 L.Ed.2d 1 (1991). Id. at 785.69 Unlike in Hilao, however, Interior's proposed sampling method has not been approved by this Court. Additionally, for the reasons stated above, the relevant to the present case of a case involving a due process challenge to a procedure utilizing a sampling method is limited, at best.

Finally, the sole case cited by Interior from this Circuit demonstrates only that a reliance upon sampling methods is appropriate in the performance of an audit because an audit presupposes that individualized determinations of transactions have already been made. In Chaves County Home Health Serv., Inc. v. Sullivan, 931 F.2d 914 (D.C.Cir.1991), health care providers receiving Medicare payments challenged a decision by the U.S. Department of Health and Human Services (HHS) to utilize statistical sampling in the performance of an audit of their Medicare payment claims. The D.C. Circuit concluded that the use of sampling in the performance of the audit was appropriate because the audit merely supplemented HHS's individualized review of each claim for payment:

Id. at 917. In Chaves, HHS had contracted with private entities to review individually each payment claim submitted by a provider to determine whether the claim represented appropriate services rendered to an eligible Medicare beneficiary. Id. at 915. Claims that were approved were paid by HHS. After payments had been made, HHS audited groups of claims from each provider, using statistical sampling methods, to determine whether it had overpaid that provider. Id. at 916. The D.C. Circuit determined that this "post-payment review," which utilized sampling methods, was appropriate because it served merely as a supplement to the individualized "prepayment review" performed by HHS's contractors. See id. at 919 ("[W]e agree with HHS that the statutory scheme of individualized review of claims on pre-payment review can be reconciled with a sample adjudication procedure on post-payment review.").

The pre-payment review and post-payment audit conducted in Chaves are analogous to, respectively, an accounting and an audit performed on a trust fund. It is necessary for an accountant to make individualized determinations that each transaction during the life of the trust fund is supported by adequate documentation. By contrast, an auditor may make use of sampling methods because he or she is merely conducting a test to determine whether the accountant has rendered a proper accounting. The auditor's reliance upon sampling methods is justified because it is predicated upon the assumption that the accountant has already conducted an individualized determination of all transactions and found them to be supported by adequate documentation.

In sum, none of the cases cited by Interior provide support for the use of sampling methods in the performance of a trust accounting. Instead, they simply demonstrate that, in some instances, the use of sampling techniques in the performance of an audit will withstand due process challenges and claims that such techniques represent arbitrary and capricious action. But the holdings in these cases have little to do with the present issue—whether Interior's fiduciary duty to account is satisfied by an accounting that makes use of sampling methods for its verification of transactions, rather than matching each transaction with supporting documentation.

It is also worth observing that the courts have forbidden the use of statistical sampling in the performance of the U.S. census, which the Constitution requires to be based upon an "actual Enumeration" of the U.S. population. See Dep't of Commerce v. U.S. House of Representatives, 525 U.S. 316, 335, 119 S.Ct. 765, 142 L.Ed.2d 797 (1999) ("From the very first census, the census of 1790, Congress has prohibited the use of statistical sampling in calculating the population for purposes of apportionment."). Although the lower court decision affirmed in Commerce was based on statutory interpretation, not constitutional interpretation, a plurality of the Supreme Court concluded that "[f]or reasons of text and tradition, fully compatible with a constitutional purpose that is entirely sensible, a strong case can be made that an apportionment census conducted with the use of `sampling techniques' is not the `actual Enumeration' that the Constitution requires." Id. at 349, 119 S.Ct. 765 (Scalia, Thomas, Rehnquist, and Kennedy, JJ., concurring). Though far from an exact analogy to the present context, the plurality's decision nevertheless underscores the fact that in situations where individualized determinations of facts are required, statistical sampling methods do not furnish an adequate substitute for such determinations.

Interior, however, cites two sentences from the D.C. Circuit's 2001 opinion that seem to imply that the decision whether to employ statistical sampling in its historical accounting is committed to its discretion. The Court will quote these sentences in their surrounding context within the D.C. Circuit's opinion:

Cobell VI, 240 F.3d at 1103-04 (citations omitted).

There are two reasons why the Court understands that a determination that the statistical sampling method proposed by Interior will not result in an adequate accounting of the land-based accounts will be consistent with the D.C. Circuit's opinion. The first reason is that, as noted above, absolutely no evidence has been presented to the Court that statistical sampling methods have ever been employed in the performance of an accounting, as opposed to an audit, much less that such methods are accepted by professional accountants as part of an accounting. Indeed, Interior's sole expert witness on its sampling plan admitted that he had never heard of statistical sampling being used in an accounting. The Court does not understand the D.C. Circuit's cursory reference to "statistical sampling or something else" as "accounting methods" to represent a determination that statistical sampling is an accepted method of accounting utilized by professional accountants.

The second reason is that the D.C. Circuit has made clear that "[c]laiming the role of administrator ... does not absolve the government of its enforceable obligations to the IIM trust beneficiaries" and that "appellants may not escape from their fiduciary obligations by appealing to their roles as administrators of a federal program." The task of this Court is to determine whether the accounting proposed by Interior will satisfy its fiduciary duty to account. See Ak Chin, 667 F.2d at 1002 ("The adequacy of defendant's general accounting, however, remains an issue in this case."); Chisholm v. House, 183 F.2d 698, 703 (10th Cir.1950) ("Under the mandate of the court, the duty rested upon the trustees to account, and the burden was upon them or their sureties to establish the correctness thereof; to disclose fully and fairly the nature of each and every challenged transaction, and to satisfy the court that the administration of the trust was in accordance with the provisions of the trust instrument and the honor and integrity of a fiduciary.") (citations omitted); In re Heubach's Will, 165 Misc. 196, 300 N.Y.S. 802, 811 (N.Y.Sur.1937) ("It is a uniform principle of accounting that the account is required to reflect only the acts and transactions of the parties who are seeking a judicial approval of their fiduciary performances. Its primary purpose is to enable the court to determine whether or not they have complied with their duties respecting the assets entrusted to their charge.") (citations omitted); Conover v. West Jersey Mortgage Co., 96 N.J. Eq. 441, 126 A. 855, 861 (1924) ("Whether or not accounts are excepted to, it is the duty of the court to scrutinize them and pass and confirm them only when, after proper vouching and auditing, it appears that they are correct and ought to be confirmed.").

In Ak Chin, the issue determined by the Court of Claims was whether the United States had rendered "a full and complete accounting of its administration of plaintiff's funds, assets and property." Ak Chin, 667 F.2d at 985. It determined that the United States had "failed to account, in accordance with the fiduciary standards applicable to Indian funds and property, for funds received and held for plaintiff's benefit and for property it managed." Id. at 983. Specifically, the court found that "the information that defendant did produce is incomplete, inconsistent, and insufficient to enable the Indians to ascertain whether defendant's obligations as a fiduciary have been faithfully discharged." Id. at 1001 (emphasis added).

In the present case, it will be impossible for both the beneficiaries and this Court to determine whether Interior has properly discharged its fiduciary duty to account if transactions within the accounts are not verified by supporting documentation, but instead verified only with the use of statistical sampling methods. One of the leading treatises on trust law makes clear that

Bogert on Trusts § 962 (footnotes omitted). See also id. § 970 ("[A] trustee to sell real property and distribute the proceeds should show in his account the dates of the sale of the several properties, to whom sold, the prices received from each and when, payments which he has made, with the dates, amounts, purposes, and names of the payees, and he should present vouchers or other evidence to back his assertions as to payments."); Red Lake Band v. United States, 17 Cl.Ct. 362, 369, 370-71 (1989) (finding that "[i]t is the Government's duty to account for those disbursements by documenting them," and listing "backup documents that would normally have formed the support for an accounting," including "vouchers, invoices, bills, receipts, memoranda, or other documents"); In re Martin's Estate, 21 Wis.2d 334, 124 N.W.2d 297, 302 (1963) ("The final account of a trustee should show in detail the items expended and show when, to whom and for what purposes the payments were made so the beneficiaries can make a reasonable test of the accuracy of the accounts."); Hill v. Roberts, 311 S.W.2d 569, 571-72 (Ky.1958) (concluding that trustee had failed to provide adequate documentation of disbursements and explaining that "[a] voucher means, when used in connection with the disbursement of money, a written or printer instrument, in the nature of a bill of particulars, account, receipt, or acquittance, that shows on its face the fact, authority and purpose of the disbursement.... The cancelled checks appellee has filed do not fulfill this requirement. As before noted, many of them failed to show what the disbursement was for, and those that show the nature of the claim paid do not on their face appear to be authorized."); In re McCabe's Estate, 98 Cal.App.2d 503, 220 P.2d 614, 616, 618 (1950) ("Trustees are also under the duty to prove every item of their account by satisfactory evidence; the burden of proof is on them and not on the beneficiary; and any doubt arising from their failure to keep proper records, or from the nature of the proof they produce, must be resolved against them.... All of these matters have a bearing on whether such charges are established by satisfactory evidence, in the absence of any vouchers or records of any kind, and when all presumptions are against the trustee.") (internal quotation marks omitted); In re Strickler's Estate, 354 Pa. 276, 47 A.2d 134, 135 (1946) ("Where a fiduciary claims credit for disbursements made by him the burden rests upon the fiduciary to justify them. Proper vouchers or equivalent proof must be produced in support of such credits. Accountant's unsupported testimony is generally insufficient."). The burden is on Interior to demonstrate that each transaction is properly supported. See Davis v. Jones, 254 F.2d 696, 699 (10th Cir.1958) ("[T]he burden rested upon the trustee to show the nature of each challenged transaction; to show that the trust was administered in accordance with the trust instrument; and to show that the trustee acted honestly and with fidelity to the trust reposed in him.") (citation omitted); Garrett v. First Nat'l Bank & Trust Co., 153 F.2d 289, 292 (5th Cir.1946) ("The burden is upon the trustee to show that it has performed its trust and the manner of its performance.").

In sum, on the one hand, the sole evidence before this Court regarding the adequacy of Interior's sampling methodology is the testimony provided by a single expert witness retained by Interior, who has acknowledged that he has "never heard of an accounting statement being presented to [an] account holder based on statistical sampling." On the other hand, the Court has before it a plethora of case law demonstrating that, when performing an accounting, a trustee must satisfy the court that it has discharged its duty to account in accord with its duties as a fiduciary. Generally speaking, this entails providing adequate documentary support for each transaction. The Court also has before it no evidence that statistical sampling methods have ever been used in the performance of an accounting. Nor does it have before it the testimony of any employee of the contractor hired by Interior to develop its statistical sampling procedure.

The Court must conclude, therefore, that the statistical sampling method proposed by Interior to verify certain transactions within the land-based accounts will not be adequate to demonstrate that such transactions, in fact, occurred. The Court further concludes that Interior's utilization of such a method as part of its Accounting Plan renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund. Therefore, Interior will be required to verify the existence of such transactions through the use of supporting documentation, in the same manner as it plans to verify all other transactions within the IIM trust fund.

The Court is mindful that this determination will increase the cost and time required for the completion of the accounting. Such factors are by no means irrelevant. However, weighing against these factors is the fact that the beneficiaries themselves have overwhelmingly rejected the use of statistical sampling in the performance of Interior's historical accounting, even when confronted with the fact that such a rejection would substantially increase the time necessary to complete the accounting.

On April 3, 2000, Interior published a Federal Register notice entitled "Historical Analysis of Individual Indian Money Accounts." 65 Fed.Reg. 17521. The summary portion explained that the purpose of the notice was to "initiate[] an information gathering process with IIM account beneficiaries, and the public, to comply with Congressional directives to determine the most reasonable methods for providing accountholders with information to evaluate their accounts and to determine whether there are discrepancies due to past management practices." Id. at 17521. The notice presented examples of alternative approaches to provide beneficiaries with such information, including a transaction-by-transaction reconciliation of accounts, limited reconciliation of accounts, and an approach involving the use of statistical sampling. Id. at 17526-17527. Regarding the transaction-by-transaction accounting proposal, the notice asserted that such an approach "would be the most time consuming and expensive" of the alternatives listed, and that "it is unlikely to expect that the Congress would provide the Department with the staggering appropriations needed to fund such a process." Id. at 17526.

Despite such caveats, the vast majority of comments received by Interior in response to the Federal Register notice favored the transaction-by-transaction approach. Cobell VII, 226 F.Supp.2d at 37 ("[I]t was generally known that the results across the board from the senior managers was that ... the beneficiaries were asking for a transaction-by-transaction accounting."). Indeed, an August 11, 2000 memorandum prepared by Jim Pace, Interior's primary project officer from the Office of American Indian Trust, observed that

Id. at 38 (internal citations omitted). In sum, when offered a choice between a transaction-by-transaction accounting of the IIM trust fund and an alternative procedure relying upon statistical sampling techniques, the overwhelming consensus of the IIM beneficiaries was that a transaction-by-transaction accounting should be undertaken, despite the fact that it would be a time-consuming endeavor. Given the choice, in other words, between an actual accounting and an accounting alternative that would take much less time, the beneficiaries decided that it was better to have the job done right than to have it done quickly.

It is also important to note that, despite the language in the Pace memorandum, Congress has by no means "already dismissed such a solution." Indeed, the legislative history to the 1994 Act makes clear that Congress anticipated that, due to the sorry state of IIM trust fund management, the performance of a historical accounting would require a considerable investment of time and resources:

H.R. REP. No. 103-778, at 10 (1994), reprinted in 1994 U.S.C.C.A.N. 3467, 3469. Congress, in other words, clearly recognized that a proper accounting would necessarily be a long-term endeavor, given the "depth and breath of the problems regarding Indian trust assets."70

It is true that one current Member of Congress, and two former Members, have apparently voiced some concerns about time and cost estimates for a transaction-by-transaction accounting contained in a July 2, 2002 report to Congress from Interior. It should be noted at the outset, however, that the report underscored the highly tentative nature of these estimates:

Report to Congress on the Historical Accounting of Individual Indian Money Accounts, July 2, 2002 (Defs.' Ex. 56).

Additionally, the issue is not whether one current Member (and two former Members) might have expressed concerns about Interior's July 2002 report to Congress. The issue is whether the statistical sampling method proposed by Interior to verify the existence of millions of transactions in the land-based accounts will result in an adequate accounting, as mandated by the 1994 Act and by Interior's pre-existing fiduciary obligation to account. The Court does not discount the statements made by the Members, but such statements are not determinative of the issue presently before the Court.71 Additionally, the Court does not equate the opinions of a single current House Member (and two former Members) with the intent of the full House of Representatives, much less with the intent of the full Congress.

In sum, the Court finds that the statistical sampling method proposed by Interior to verify certain transactions within the land-based accounts does not represent an adequate method of demonstrating that such transactions, in fact, occurred. Nor will the utilization of such a method satisfy Interior's fiduciary duty to account for all funds within the IIM trust fund. Interior will therefore be required to verify the existence of such transactions through the use of supporting documentation, in the same manner as it plans to verify all other transactions within the IIM trust fund.

3. The Reporting Process

The end stage of the performance of an accounting consists of (1) the preparation of a detailed report describing the trustee's conduct during the relevant time period, including a description of each item of property within the trust corpus, all items of property received into or disbursed from the trust, all income earned by the trust, and all expenses paid by the trust and (2) the delivery of this report to the beneficiaries of the trust. The D.C. Circuit has stated that "[u]nder traditional equitable trust principles, the trustee's report must contain sufficient information for the beneficiary readily to ascertain whether the trust has been faithfully carried out." Cobell VI, 240 F.3d at 1103 (citation and internal quotation marks omitted). The Court will therefore review Interior's representations as to the report it intends to deliver to the beneficiaries at the end of the historical accounting process.

During the Phase 1.5 trial, Associate Deputy Secretary Cason testified regarding the intended end product of the historical accounting:

Tr., Day 21, AM session (June 4, 2003) at 19:23—20:11, 21:14—22:5. See also id. at 76:25—77:7 ("It's my understanding that the all-funds are the funds that were actually in the IIM trust fund, that we would trace backwards on an individual-by-individual basis to the origin of each individual account and, through the posting of transaction history, both income and disbursements, provide the beneficiaries with a detailed statement of funds that passed through the IIM trust fund on an individual basis.") (testimony of James Cason).

Cason's testimony is consistent with Interior's Accounting Plan, which represents that

Interior's Accounting Plan at I-1. The Plan includes an appendix containing examples of redacted quarterly account statements provided to IIM account holders, which are presumably similar in form to the Historical Statements of Account that Interior proposes to send to each IIM account holder at the end of the historical accounting. The quarterly statements include an opening balance; a description of receipts, disbursements, and other changes to the account; a closing balance; and a telephone number for the account holder to call if he or she has questions about the statement.

Generally speaking, the Court finds that the Historical Statements of Account that Interior proposes to send to each IIM account holder at the end of the historical accounting process will satisfy its obligation to provide "sufficient information for the beneficiary readily to ascertain whether the trust has been faithfully carried out." Of course, in light of the Court's determination that the historical accounting must include an accounting of the assets of the IIM trust, it will be necessary to include in the Historical Statements of Account more than just a statement of land ownership as of December 31, 2000. Instead, the statement must include a description of the assets in the account at the inception of the account, all changes to the assets, and a description of the assets presently in the account, e.g., land and leases. However, with this addition, the Court finds that the format proposed by Interior for the accounting statement to be delivered to each IIM account holder following the completion of the historical accounting process to be consistent with its fiduciary obligations to the IIM beneficiaries.

4. The Quality Control Process

a. System Tests

The first type of quality control process that Interior proposes to undertake in its Plan consists of a series of system tests on the IIM trust fund. Its Plan states:

Id. at III-17 to III-18.

The stated purpose of these system tests is to "show whether there was integrity in the overall processes and systems used to administer the IIM Trust Fund for the period at issue." Id. at III-18. During the Phase 1.5 trial, Associate Deputy Secretary Cason testified:

Tr., Day 21, AM session (June 4, 2003) at 22:20—23:7. Regarding the planned system tests, Special Trustee Ross Swimmer explained:

Tr., Day 41, AM session (July 2, 2003) at 54:21—55:23. The Court will analyze Interior's descriptions of the five proposed system tests.

First, to test whether significant amounts of data are missing from its electronic systems, Interior plans to test for gaps in the systems. As described above, Interior will "search for other records of the transactions posted to accounts in an attempt to close identified gaps." Interior's Accounting Plan at III-18. Additionally, Interior explains:

Id.

Second, Interior will test whether accounts or transactions were lost during two major records system conversions that occurred recently:

Id. at III-19.

Third, Interior will perform a system test to determine whether its calculation of interest for the IIM accounts was performed accurately:

Id. During the Phase 1.5 trial, Michelle Herman, a director with the accounting firm of KPMG, LLP, further described this system test:

Tr., Day 23, AM session (June 6, 2003) at 41:17—42:9, 42:13—43:6.

Fourth, in order to determine whether monies collected by Interior as trustee-delegate were actually deposited into the IIM trust fund, Interior will conduct what it calls a "posting test":

Interior's Accounting Plan at III-20. This test was described by Herman during the Phase 1.5 trial as a "document-to-transaction test." See Tr., Day 23, PM session (June 6, 2003) at 45:6-12 ("OHTA has created a test to attempt to determine if there were transactions that were not recorded in the system, and that test is essentially referred to as a document-to-transaction test, so you sample documents and then you determine whether or not there is a transaction that was recorded in the system for those documents.").

Fifth, Interior will conduct a system test to determine the accuracy of the IIM trust fund's land ownership records:

Id.

Interior estimates that these system tests may cost as much as $25 million, and plans to complete them by fiscal year 2006, which ends on September 30, 2006. Id. Generally speaking, the Court has no quarrel with these five system tests described by Interior. Moreover, the fact that some of them utilize statistical sampling techniques does not necessarily render them invalid. As explained above, the Court's objection is not to the use of statistical sampling methods per se, but to the use of such methods as a substitute for individualized determinations of the accuracy of each transaction within the IIM trust accounts. However, when used as a supplement to such individualized determinations —for example, in the performance of aggregate system tests—the use of statistical sampling techniques may well be appropriate.

However, the descriptions of these tests in Interior's Plan are so cursory that it is impossible for the Court to determine whether they will function as adequate quality control measures for their stated purposes. They may, or they may not—it is impossible to determine from the evidence before the Court. As compared to the other processes discussed during the Phase 1.5 trial, the quality-control process received relatively little attention. The Court is by no means lamenting that the Phase 1.5 trial was too short—far from it. But the Court will require more detailed information from Interior before it can render any determination as to whether its five system tests represent adequate quality-control measures. The fact that Interior's Plan includes only cursory descriptions of these tests renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund. Therefore, the Court will direct Interior to submit a plan describing in detail each of the five above-described system checks, including a time and cost estimate for its implementation. If a system check will involve the use of sampling techniques, Interior should provide a detailed description of the technique to be applied, including the sample size and sampling method to be relied upon. Following Interior's submission of its detailed plan, the Court will afford plaintiffs an opportunity to respond to the plan.

b. Other Quality Control Measures

Interior states that, in addition to the five system tests it will conduct, it is currently implementing other quality control measures. Specifically, it states, OHTA is currently "implementing quality control (QC) checks to achieve best practices at each phase of the historical accounting process, including data inputs, systems and infrastructures, processing, and outputs." Id. at C-2. Interior's Plan includes an appendix describing "five areas of OHTA's quality control plan." Id. The Court will analyze those descriptions below.

The first area of OHTA's quality control plan is described as ensuring a "basic approach to quality." Interior explains:

Id. at C-2 to C-3.

The second area of OHTA's quality control plan is described as an "overall quality check process." Interior states that "[a]n OHTA external QC check typically involves six steps." Id. at C-3. These steps are described as (1) developing a plan, (2) conducting an analysis, (3) drafting a report, (4) resolving the report's findings, (5) issuing a final report, and (6) conducting a follow-up quality check, if necessary. Id.

The third area of OHTA's quality control plan deals with records collection and imaging. Interior states that it

Id. at C-4.

The fourth area of OHTA's quality control plan deals with the accounting results produced by the accounting firms hired by Interior:

Id.

The fifth area identified in Interior's Plan involves a quality check of Interior's information systems:

Id. at C-4 to C-5.

As with the five system tests described above, generally speaking, Interior's descriptions of these quality control measures sound promising, but are rather short on details. This is all the more curious given that Interior has described each of these measures as currently being implemented. Presumably, it would not be difficult to describe in detail which measures have already been implemented, and which are in the process of being implemented. The fact that Interior's Plan includes only cursory descriptions of these measures renders it a Plan that will necessarily delay, rather than accelerate, the performance of an adequate historical accounting of the IIM trust fund. Therefore, the Court will direct Interior to submit detailed descriptions of each of the quality control measures described above that have already been implemented. It will also direct Interior to submit detailed descriptions of quality control measures that Interior will undertake, in conjunction with the historical accounting process. Interior should include a detailed description of all proposed quality control measures, not just those in the five areas listed above. After reviewing these descriptions, the Court will determine whether Interior's quality control measures will provide an adequate control process, one that will satisfy Interior's duty to account for the IIM trust fund.

Given the deficiencies in Interior's Plan, it is worth examining the accounting plan presented by plaintiffs to determine whether it provides an approach that better satisfies Interior's duty to account. The Court now turns to Plaintiffs' Accounting Plan.

C. Plaintiffs' Accounting Plan

The Plan advocated by plaintiffs is premised upon the notion that "the accounting owed by the United States government and ordered by this Court is impossible." Pls.' Accounting Plan at 3 (Pls.' Ex. 50). Specifically, plaintiffs assert that a proper accounting is impossible, given that numerous gaps exist in the record of IIM trust documents maintained by the government, and that the extant records cannot be presumed to be reliable. Accordingly, plaintiffs have presented the Court with an alternative method for determining the correct balance in IIM trust accounts.

Plaintiffs' Plan relies heavily on the use of Geographic Information System ("GIS") data overlays. Simply put, GIS is a type of "computer software that links geographic information (where things are) with descriptive information (what things are)." ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, GEOGRAPHY MATTERS: AN ESRI WHITE PAPER 1, available at http://www.gis.com/whatisgis/geography-matters.pdf. In other words, GIS permits the creation of "smart maps" linked to a computer database. See http://www.gis.com/whatisgis/whatis-gis.pdf. As explained by plaintiffs, their Plan

Pls.' Accounting Plan at 39-40 (footnote omitted).

Thus, for example, plaintiffs purchased an oil and gas industry database entitled "PI/Dwights," which "provides cumulative oil and gas production for each well drilled in the United States through 1972, with annual and monthly data thereafter," a database that is "generally used by industry participants to forecast future oil and gas production volumes." Id. at 42-43. As explained by plaintiffs' financial modeling expert, Richard Fasold:

Tr., Day 10, PM session (May 14, 2003), at 26:25—27:3; 27:9-20. However, although plaintiffs had managed to construct a history of production data of oil and gas for all wells on Indian reservations that had been subject to allotment, trying to determine which wells were located on allotted lands proved more difficult. As plaintiffs observe,

Pls.' Accounting Plan at 41-42. In other words, to estimate the total revenues produced from oil and gas wells located on allotted lands in a particular reservation, plaintiffs performed the following calculation:

Plaintiffs employed a similar method to estimate the total revenue from the production of hard rock minerals on allotted lands. However, plaintiffs were unable to locate a national database of timber production similar to the databases of oil and gas and mineral production that they had located. Therefore, plaintiffs retained an expert on timber production, Dr. Alan McQuillan, to calculate the total revenue from the production of timber on allotted lands. Finally, no national database could be found representing sales or leases of land. Accordingly, to estimate the total revenue from land sales or leases of allotted lands, plaintiffs made use of data maintained by Interior.72

Plaintiffs' Plan represents an impressive use of technology in an attempt to solve a very difficult problem. However, as plaintiffs concede, while their Plan does produce an estimate of total revenue from allotted lands, it does not contain a method for allocating that revenue among beneficiaries of the IIM trust. Rather than determine such a method, plaintiffs have proposed instead that this Court develop an appropriate method of allocation through a series of fairness hearings conducted to determine what disbursements were actually made to beneficiaries. See Tr., Day 11, AM session (May 15, 2003) at 71:11-20 (testimony of Richard Fasold). During the Phase 1.5 trial, plaintiffs' financial modeling expert explained:

Tr., Day 12, PM session (May 16, 2003) at 18:15—19:10.

The bottom line is that to constitute a historical accounting, the Plan advocated by plaintiffs would require significant modifications —namely, the addition of (1) a methodology to determine what disbursements were made from the IIM trust fund, in what amounts they were made, and whether they were distributed to the proper beneficiaries and (2) a means of allocating funds that were not properly disbursed in the correct amount to the correct beneficiaries. But the addition of these measures to plaintiffs' Plan would necessitate directing Interior to perform many of the same tasks required in Interior's own Plan. That is, a determination of which disbursements were made, in what amount, and to which beneficiaries would necessarily entail indexing the available trust records, collecting additional trust records from third parties, and matching transaction ledgers with supporting documentation.

In sum, the Court must conclude that neither plaintiffs' Plan nor Interior's Plan, as they now stand, will satisfy Interior's duty to account. Both Plans will require substantial modification before they can be accepted by this Court as adequate to discharge that duty. Having made this conclusion, the Court must also conclude, based on Brown II, Lewis v. Casey and similar precedents, that it should choose Interior's Plan as the basis for the relief it intends to order. The Supreme Court has made clear that courts are to afford institutional defendants the opportunity, in the first instance, to present a proposal to satisfy their legal obligations to the plaintiffs. It follows that, if both plaintiffs and an institutional defendant submit plans that a court has determined to be inadequate to satisfy these obligations, the court should select the institutional defendant's plan as the foundation upon which it formulates relief, because of the presumed administrative expertise of the institutional defendant.

It does not follow, however, that this Court should simply discard Plaintiffs' Accounting Plan. During cross-examination by plaintiffs, one of Interior's expert historians, Alan Newell, indicated that a production database might be useful to Interior to help fill in gaps in trust record data:

Tr., Day 33, AM session (June 20, 2003) at 63:7—64:8. Additionally, during closing arguments, defense counsel acknowledged that use of a production database (such as those utilized by plaintiffs in their Plan) might provide a useful supplement to the methods utilized in Interior's Plan:

Tr., Day 44, AM session (July 8, 2003) at 86:19—87:19.

The Court recognizes that defense counsel was not making any commitment on behalf of Interior to examine the utility of production databases or the use of GIS in Interior's accounting. Additionally, the Court realizes, given the strained relationship between the parties, that Interior may be loath to acknowledge the usefulness of any idea advanced by plaintiffs. But the testimony presented at trial about the potential usefulness of production databases has piqued the Court's interest. Given Newell's testimony that the use of a resources database might be useful in attempting to fill in data gaps, and defense counsel's observation that OHTA is receptive to ideas that will assist it in improving the reliability and accuracy of their proposed accounting, the Court believes that the use of production databases such as PI/Dwights in conjunction with software such as GIS certainly warrants further study. The Court will therefore direct Interior to analyze the use of such production databases and software as a potential means of gap-filling, and to analyze the potential usefulness of such databases and software as a test or verification of the completeness of its accounting. In other words, Interior should consider whether the use of such databases and software will serve as a useful quality control measure for the historical accounting process. The Court will direct Interior to submit its analysis when it submits its plans for conducting other quality control measures, as described above. If Interior decides not to utilize such databases and software, it should explain, in detail, which measures it has already implemented or will implement that will function as an adequate means of gap-filling and verifying the completeness of its historical accounting. It should also explain why the use of production databases such as PI/Dwights and software such as GIS will not serve as an appropriate supplement to such measures.

VI. RELIEF TO BE ORDERED

In one sense, a structural injunction issued at the present stage of this litigation represents a permanent injunction, in that this Court has already held a trial on the merits—namely, the Phase I trial. In another sense, however, a structural injunction issued this date may be considered to be a preliminary injunction, in that the Phase II trial has not yet been conducted. In any event, the Court will apply the standard four-part test relating to the issuance of injunctive relief, which is the same test that would apply to this Court's analysis of a motion seeking a stay of its structural injunction pending an appeal. The Court's conclusions with respect to the four-part test will make clear why this Court will neither grant any stay of the structural injunction to be issued this date nor entertain any motion seeking such a stay.

A. The Four-Part Test

When considering a request for injunctive relief, a court must analyze four factors: (1) whether the movant has demonstrated a substantial likelihood of success on the merits; (2) whether the movant would suffer irreparable injury if the requested relief is not granted; (3) whether the injury to the movant if the injunction is not granted outweighs the injury to other interested parties who will be affected by the injunction; and (4) whether the issuance of the preliminary injunction would further the public interest. See Al-Fayed v. CIA, 254 F.3d 300, 303 (D.C.Cir. 2001); George Washington Univ. v. District of Columbia, 148 F.Supp.2d 15, 17 (D.D.C.2001). The Court will analyze these factors separately.

1. Substantial Likelihood of Prevailing on the Merits

The leading commentators on the federal courts have explained that the relevance of the first factor is that "the need for the court to act is, at least, in part, a function of the validity of the applicant's claim." 11A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2948.3, at 184 (2d ed.1995). By its very nature, a preliminary injunction is entered before a full trial on the merits has occurred. The district court must therefore make some determination as to whether the movant has demonstrated a substantial likelihood that it will prevail on the merits, in order to minimize the risk of unwarranted injury to the party against whom the injunction will be issued. However, the degree of likelihood of success is not a determinative factor.

Plaintiffs have already prevailed on the merits in the first phase of the present litigation. Therefore, in light of their previous success on the merits, the Court finds that plaintiffs have demonstrated a substantial likelihood that they will prevail on the merits.

2. Irreparable Injury

This Court has already determined that the implementation of Interior's Plan, as is, will necessarily delay rather than accelerate the ultimate provision of an adequate accounting for the IIM beneficiaries. The D.C. Circuit has previously declared that "[g]iven that many plaintiffs rely upon their IIM trust accounts for their financial well-being, the injury from delay could cause irreparable harm to plaintiffs' interests as IIM trust beneficiaries. Thus it seems that the interests at stake are not merely economic interests in an administrative scheme, but personal interests in life and health." Cobell VI, 240 F.3d at 1097 (citation and internal punctuation omitted). The Court therefore finds that the delay of an adequate accounting—that is, one that will fully discharge Interior's fiduciary duty to account—that will be caused by the implementation of Interior's Plan, as is, will result in irreparable harm to plaintiffs.

3. Balance of Hardships

In determining whether to grant preliminary injunctive relief, this Court must weigh the potential harm to plaintiffs if the injunction is not granted against the potential harm to other interested parties who will be affected by the injunction. The issuance of a structural injunction will add to Interior's administrative workload and result in an increased expenditure of public funds. The imposition of additional tasks to be performed by administrative agencies is not a matter to be taken lightly. Nor is directing an increase in the expenditure of public moneys an insignificant hardship.

On the other hand, the hardship to the IIM beneficiaries that would result from a further delay of the long-promised accounting of their trust fund is simply beyond the pale. Many of the beneficiaries live at a subsistence level, and depend on their IIM trust fund checks in order to purchase basic necessities such as food and drink. The delay of an adequate accounting of their funds therefore directly affects their basic ability to survive. Although neither the imposition of additional tasks upon an administrative agency nor the requirement that taxpayer funds be made available to fund such tasks represent insignificant hardships, both of these must be weighed against the personal interests in life and health of an estimated 300,000 to 500,000 American Indians. The Court thus concludes that the potential harm to these hundreds of thousands of beneficiaries that would result if an injunction is not issued outweighs the potential harm to Interior if such an injunction is issued.

4. Furtherance of the Public Interest

The final factor to be examined is whether the issuance of an injunction in the present case would further the public interest. The Court has determined that the issuance of a structural injunction is necessary in the present case in order to compel Interior's compliance with its legal obligations to the IIM beneficiaries. When a government agency has unreasonably delayed action in a manner that affects not only the property rights of hundreds of thousands of American citizens, but also undermines their fundamental rights of survival, the issuance of an order that will compel the agency to comply with its legal obligations to those citizens in a reasonable manner directly advances the public interest. Moreover, if executive branch officials can defy legal obligations imposed by Congress and the courts with impunity, the American public will respond with increased cynicism regarding its elected representatives. The public interest is advanced whenever the American public sees that federal officials are not above the law, but are instead governed by the rule of law just as the average American citizen is. As the Supreme Court famously declared: "The government of the United States has been emphatically termed a government of laws, and not of men. It will certainly cease to deserve this high appellation, if the laws furnish no remedy for the violation of a vested legal right." Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163, 2 L.Ed. 60 (1803).

Only a structural injunction will furnish an adequate remedy for Interior's violations of the vested legal rights of the plaintiffs in this action. The Court will therefore issue a structural injunction to compel the compliance of the Department of the Interior with its duty to account for the IIM trust fund.

B. Structural Injunction

As noted above, generally speaking, structural injunctions may take one of two forms: identifying performance standards or ordering specific remedial actions. A performance-standard injunction orders specific types of remedial accomplishments, with the means of accomplishment left largely up to the discretion of the institutional defendant. On the other hand, a structural injunction may simply direct that particular remedial actions be taken, and leave the institutional defendant with little or no flexibility concerning the remedial goals to be achieved or the means of attaining them. The prevailing trend in the federal courts is to favor the use of performance-standard injunctions. Moreover, the most recent D.C. Circuit opinion in this case indicated a general disinclination towards "court decrees that are as thick as phone books," which are typical of specific-remedy injunctions. Cobell VIII, 334 F.3d at 1143 (citation and quotation marks omitted). Accordingly, the Court will model its injunction as a performance-standard injunction.

The issuance of a structural injunction in any litigation invests the parties with opposing incentives. The institutional defendant has an incentive to interpret the provisions of the injunction as narrowly as possible, in order to render compliance with those provisions a minimal endeavor. On the other hand, the plaintiffs have an incentive to interpret the provisions as broadly as possible, in order to make it easier for the court to invoke its contempt powers, which might thereby include the granting of further relief to the plaintiffs. There are two ways for a court to deal with such competing incentives. One is to make its injunction as specific as possible, and to state precisely the individual tasks that are expected of the institutional defendant. As already explained, the Court has decided against formulating its injunction in such a manner. The other way is to take steps to ensure that the injunction is not interpreted by the parties either too narrowly or too broadly. Such a method not only helps preserve the discretion of the institutional defendant, but also eliminates the necessity of issuing an injunction as thick as a phone book.

Accordingly, if at any time, (1) Interior's implementation of the injunction is affected by the existence of a provision that is susceptible to more than one reasonably plausible interpretation, or (2) it appears to the plaintiffs in this action that Interior is interpreting a provision of the injunction too narrowly or incorrectly, then either of the parties may file a motion for the Court to clarify the provision or provisions at issue. In order to increase Interior's incentive to file timely motions for clarification, the Court will direct that if Interior's implementation of the injunction is affected by the existence of a provision that is susceptible to more than one reasonably plausible interpretation, Interior should adopt the interpretation that is most consistent with the "most exacting fiduciary standards" demanded of a trustee. See Cobell VI, 240 F.3d at 1099 ("The federal government has charged itself with moral obligations of the highest responsibility and trust in its relationships with Indians, and its conduct should therefore be judged by the most exacting fiduciary standards."). The Court's inclusion of such a provision is unfortunately necessary, given Interior's demonstrated tendency to evade its legal obligations by interpreting applicable statutes and court orders in an unduly narrow manner. See, e.g., Cobell v. Babbitt, 37 F.Supp.2d 6, 16-17 (advancing the argument that a discovery order to produce "[a]ll documents ... relat[ing] to IIM accounts of the five named plaintiffs or their predecessors in interest" meant only that Interior was required to produce either documents relating to the five named plaintiffs or documents relating to their predecessors in interest); Cobell v. Norton, 260 F.Supp.2d 110, 127 (D.D.C. 2003) (asserting that Interior could not answer the question "Whether, at any time, the GAO has conducted a final comprehensive audit of individual Indian trust accounts" because plaintiffs had not defined the term "final comprehensive audit"); Defs.' Prop. Findings and Conclusions at 133-34 (arguing that "Congress's use of forward-looking language in [section 102 of the 1994 Act] confirms that Congress did not intend that Section 102 apply to accounts closed prior to the enactment of the 1994 Act" because the Act "does not say that the Secretary shall account for all funds that `have ever been' or `were' deposited or invested pursuant to 25 U.S.C. 162a. Instead, Congress specifically used the present tense and limited the requisite accounting to funds `which are deposited or invested pursuant to the Act of June 24, 1938.'"). The inclusion of such a provision is in accordance with the D.C. Circuit's admonition in Cobell VI:

Cobell VI, 240 F.3d at 1102-03 (emphasis added) (internal citations and quotation marks omitted).

C. Appointment of a Monitor

It is routine for courts issuing a structural injunction to appoint a monitor to report on the defendant's compliance with the injunction and on the progress achieved by the defendant towards achievement of the goals of the injunction. The necessity of making such an appointment has been neatly summed up by another district court:

Jones v. Wittenberg, 73 F.R.D. 82, 85 (N.D.Ohio 1976). The D.C. Circuit recently alluded to this practice in its most recent opinion in this litigation, noting its awareness of

Cobell VIII, 334 F.3d at 1142. Before determining whether it should appoint a monitor to oversee the structural injunction issued this date, the Court will examine each of the cases cited by the D.C. Circuit.

Ruiz v. Estelle was one of the decisions in the Texas prison reform litigation discussed supra. In issuing a structural injunction, the district court had concluded that "the relief to be ordered in this case cannot effectively and completely be performed without the appointment of one or more special masters to monitor and supervise defendants' compliance efforts." Ruiz v. Estelle, 503 F.Supp. 1265, 1390 (S.D.Tex.1980). It therefore directed:

Id. The Fifth Circuit affirmed the district court's appointment of the special master and "several monitors" to observe and report upon the defendants' compliance with the structural injunction. It first noted that the district court had stated several reasons for its decision to make the appointment: the difficulty of superintending the implementation of "a comprehensive, detailed plan for the elimination of the unconstitutional conditions found to exist in the Texas prison system"; [defendants'] "record of intransigence toward previous court orders requiring changes in [their] practices and conditions"; the "strained" working relations between [defendants'] lawyers and the plaintiffs' lawyers; [defendants'] failure to acknowledge even "completely evident" constitutional violations; and [defendants'] failure to conform its actual practices to its written policies and procedures. The district court did not, as [one defendant] implies, simply rely on the "mere complexity" of the case. Moreover, the court was not required to await the failure or refusal of [defendants] to comply with the decree before appointing an agent to implement it. Noncompliance may constitute one "exceptional condition" under rule 53 [of the Federal Rules of Civil Procedure], but it is not exclusive.

Ruiz, 679 F.2d at 1160-61 (footnotes omitted). The Fifth Circuit then explained that

Id. at 1161-62 (footnotes and internal punctuation omitted). It observed, however:

Id. at 1162 (footnotes and internal punctuation omitted). Accordingly, the Fifth Circuit directed that the special master's order of reference be amended to clarify (1) that neither he nor the monitors possessed the "authority to hear matters that should appropriately be the subject of separate judicial proceedings, such as actions under § 1983, and that their duties are restricted to those set forth in the order of reference"; and (2) that the reports, findings, and conclusions of the special master were not to be afforded the presumption of correctness nor be subject to a "clearly erroneous" standard of review. Id. at 1163.

Halderman v. Pennhurst State Sch. & Hosp. is one of the opinions in the Pennhurst litigation discussed supra. The district court in Halderman, having determined that the implementation of a structural injunction would be "impossible without the appointment of a Special Master," appointed a master "with the power and duty to plan, organize, direct, supervise and monitor the implementation of this and any further Orders of the Court." Halderman v. Pennhurst State Sch. & Hosp., 446 F.Supp. 1295, 1326 (E.D.Pa.1977). It directed the defendants to provide the master with "access to all premises, records, documents and personnel and residents and with every other cooperation and service necessary to the discharge of the Master's duties." Id. The Third Circuit affirmed the appointment of the master, rejecting the defendants' argument that "any use of a master for implementation purposes intrudes excessively into the proper domain of local autonomy." Halderman, 612 F.2d at 111. It explained:

Id. (footnotes omitted). Therefore, the Third Circuit stated:

Id.

Finally, Gary W. v. State of Louisiana, 601 F.2d 240 (5th Cir.1979), is another institutional reform case involving mental health institutions. The defendants appealed the district court's appointment of a special master to monitor the implementation of a previously-issued structural injunction. The Fifth Circuit affirmed. First, it rejected the defendants' argument that the district court was required to conduct an evidentiary hearing before appointing such an official. Second, it deemed the defendants' assertion that the authority afforded the special master exceeded that authorized by Federal Rule of Civil Procedure 53(c) to be "without basis":

Id. at 245 (citations omitted).

The appointment of a monitor to report on Interior's compliance with the Court's structural injunction will be appropriate. First, as in Ruiz, Interior has demonstrated its intransigence towards previous orders in the present case requiring changes in its practices and conditions; the relations between plaintiffs' counsel and defense counsel is strained (to put it mildly); and Interior has both repeatedly failed to acknowledge even "completely evident" violations of its fiduciary duties to the IIM beneficiaries, and failed to conform its actual practices to its written policies and procedures. Second, as noted above, the Court has invited plaintiffs to file a motion for clarification if it appears at any time that Interior is interpreting the provisions of the structural injunction in an unduly narrow fashion. In order for plaintiffs to be able to determine whether Interior is interpreting the injunction in such a manner, it will be necessary to provide a means for the generation of regular reports of the injunction's implementation by a detached, neutral observer. It has become apparent to the Court that the quarterly reports issued by Interior will not satisfy this need.

The reason that the quarterly reports will be inadequate for such a purpose is that Interior is necessarily an interested party in the implementation of the injunction. As a defendant in this litigation, it cannot be expected to be an objective reporter of events related to the implementation process. Because it possesses a natural incentive to view the process with rose-colored glasses, it must be expected that any reports of the various stages of implementation will tend to err on the side of over-optimism. Moreover, the D.C. Circuit has acknowledged that a number of Interior's quarterly reports have "painted an overly sunny picture of the status of the TAAMS project and were misleading about the progress being made in ways painstakingly identified by the district court." Cobell VIII, 334 F.3d at 1149. Additionally, as noted during the Phase 1.5 trial, the extent to which the goals of the quarterly reports have been hindered by the use of bureaucrat-speak have become painfully clear. For example, prior to Interior's filing of its ninth quarterly report, it had decided to prioritize its efforts to "clean up" IIM trust data. As testified by Special Trustee Ross Swimmer, there was an effort to "pull back from the nationwide effort at trying to do data cleanup, and [we were] again trying to focus our efforts on developing [a] database type warehouse that can house data and ensure the capability of keeping it clean and organized." Tr., Day 41, PM session (July 2, 2003) at 25:16-20. However, the Court observed the near-impossibility of discerning this policy shift from simply reading the Ninth Report:

Id. at 36:7-21.

The Court is mindful of the D.C. Circuit's holding in Cobell VIII that "the district court does not have inherent power to appoint a monitor—at least not a monitor with the extensive duties the court assigned to [the Special Master-Monitor]— over a party's substantial objection, here the Government's objection that the appointment violated the separation of powers." Cobell VIII, 334 F.3d at 1141. However, the D.C. Circuit immediately thereafter clarified this holding by explaining: "As the foregoing sentence conveys, our holding is a narrow one, tethered to the peculiar facts recounted below." Id. Additionally, the D.C. Circuit specifically distinguished the issue before it from cases in which district courts have appointed monitors to supervise the implementation of a structural injunction, such as Ruiz, Halderman, and Gary W. It explained that

Cobell VIII, 334 F.3d at 1142-43 (citations and internal punctuation omitted).

This Court will abide by the limits set forth by the D.C. Circuit. Accordingly, the Court will appoint a monitor, to be assisted by several subordinate officials, to monitor the implementation of this Court's structural injunction. It will direct Interior to provide the monitor and his or her agents with unlimited access to Interior's premises and records, as well as the power to conduct confidential interviews with Interior officials and employees. It will also direct Interior to compensate the monitor and his or her agents for all expenses incurred in connection with their appointment. Interior shall bear these expenses because the inadequacy and misleading nature of the quarterly reports submitted by Interior has necessitated the appointment of the monitor. The Court will instruct the monitor and his or her agents not to intervene in the administrative management of Interior, and not to direct the Interior defendants or any of their subordinates to take or refrain from taking any specific action to achieve compliance. It will further direct the monitor and his or her agents not to consider matters that go beyond superintending compliance with this Court's injunction.

D. Timetable

In order for the Court to determine the extent of Interior's progress in implementing the structural injunction, it will be necessary to establish a specific timetable for the completion of specific endeavors, and for the completion of the historical accounting as a whole. As noted above, the Court has concluded that Interior's proposals for accounting for the judgment, per capita, and special deposit accounts represent reasonable approaches. But whether the proposals are reasonable as a whole depends on whether they will be implemented within a reasonable amount of time. Without a definite timetable, it is impossible for the Court to make such a determination. The same is true for the performance of the historical accounting as a whole.

Interior's Accounting Plan represents that "the work described in this Plan is expected to take five years to complete ..." Id. at 1. However, testimony presented during the Phase 1.5 trial made clear that the five-year figure does not represent a firm estimate. For example, Associate Deputy Secretary Cason testified:

Tr., Day 21, AM session (June 4, 2003) at 13:3-15. Certainly, the anticipated end date of any multi-year undertaking must necessarily be somewhat speculative. Nevertheless, it will be necessary to establish a timetable in order to determine whether Interior is, in fact, complying with the structural injunction issued this date. It is well-established that a court may establish a timetable or order deadlines when agency action has been unreasonably delayed. In Natural Resources Defense Council v. Train, 510 F.2d 692 (D.C.Cir. 1974), an environmental group sought to compel the EPA to publish a set of guidelines mandated by provisions in an environmental statute. The district court ordered the EPA to publish the guidelines in accordance with a detailed timetable established by the court. In affirming the district court's establishment of the timetable, the D.C. Circuit explained:

Id. at 704-05 (footnotes omitted). It also expressed its approval of the procedures adopted by the district court in establishing the timetable:

Id. at 705 (footnotes omitted). The D.C. Circuit explained the circumstances under which the district court should consider modifying the deadlines it had established:

Id. at 713 (emphasis added) (footnotes and internal quotation marks omitted).

Similarly, in Farmers Union Central Exchange v. FERC, 557 F.Supp. 34 (D.D.C.1982), a district court in this circuit ordered FERC to issue a decision within sixty days that had been pending before the agency for four years. In rejecting FERC's application for a stay of the order, the court explained:

Id. at 36-37 (emphasis in original). And in Pulido v. Heckler, 758 F.2d 503 (10th Cir. 1985), the Tenth Circuit rejected the argument of the Secretary of Health and Human Services that "even if she is under a duty to promulgate regulations [mandated by the Social Security Act], it is within her discretion to decide when those regulations should be proposed." Id. at 507. The court explained:

Id. at 507, 508 (internal citations, punctuation, and footnote omitted).73

The 1994 Act was passed nine years ago. Both this Court and this D.C. Circuit have already concluded that Interior has unreasonably delayed in taking measures to comply with its fiduciary obligations, the existence of which were reaffirmed by the 1994 Act. The Plans submitted by Interior do contain a schedule for Interior's completion of specific tasks that form a part of either the historical accounting process or the process of bringing itself into compliance with its fiduciary duties. However, none of the Plans submitted by Interior create any legal obligation to take any steps to comply with its obligations. The provisions of Interior's Accounting Plan merely state that "Interior intends to" or "Interior plans to" take steps to implement them. And the other two Plans filed with this Court both contain carefully-worded disclaimers absolving Interior of any legal duty to actually implement any portion contained in them.74 Given Interior's unreasonable delay in taking any substantive measures to comply with its fiduciary duties to the IIM beneficiaries, including its duty to account, the Court concludes that a timetable setting forth a definite schedule within which Interior must comply with its duties will be necessary to ensure that these duties are, in fact, complied with.

Therefore, the Court will include in its structural injunction a schedule for Interior to complete specific tasks, based on the anticipated dates of completion of such tasks provided in Interior's Plans. The Court will direct Interior to inform the Court immediately if it becomes aware of information that might affect its compliance with the timetable. See Int'l Union, United Auto., Aerospace & Agric. Implement Workers of Am., UAW v. Donovan, 756 F.2d 162, 165 (D.C.Cir.1985) ("Mindful of past delays, ... we order OSHA to inform this court immediately of any proposed action which might interfere with the timetable.").

The Court will also direct Interior to submit a detailed proposed timetable for its completion of the historical accounting process, together with dates for completion of important milestones, including the end of the collection process, accounting process, and reporting process, as explained above. The proposed timetable should include a detailed explanation as to why each of the selected dates were chosen. It is impossible to overstress the importance of providing detailed explanations of why each of the selected dates were chosen, because the Court will review the proposed timetable to determine whether it represents a reasonable period of time for Interior to complete the entire historical accounting project, as well as whether its proposed dates for accomplishing specific subprojects within the historical accounting process represent reasonable periods of time in which to accomplish those subprojects. Following the submission of this timetable, the Court will invite plaintiffs to submit a brief in response to Interior's proposed timetable, and an alternative proposed timetable, if they wish. Recognizing that the Court's opinions issued this date may alter some of these proposed dates of completion, the Court will permit Interior to provide a new schedule for its accounting of the land-based accounts and for the historical accounting process as a whole.

E. Retention of Jurisdiction

Following the Phase I trial in 1999, this Court issued an order that included the following provision: "To ensure that defendants are diligently taking steps to rectify the continuing breaches of trust declared today and to ensure that defendants take the other actions represented to the court upon which the court bases its decision today, the court will retain continuing jurisdiction over this matter for a period of five years, subject to any motion for an enlargement of time that may be made." Cobell V, 91 F.Supp.2d at 58-59. The Court explained its reasons for including this provision in its order:

Id. at 7. The D.C. Circuit affirmed this Court's retention of jurisdiction over the present case, noting:

Cobell VI, 240 F.3d at 1109 (internal citations omitted).

Interior has represented to the Court that its best guesstimate for completion of the historical accounting process is five more years. Therefore, in accordance with the D.C. Circuit's observation that "federal courts regularly retain jurisdiction until a federal agency has complied with its legal obligations," the Court will extend its retention of jurisdiction over the present matter for an additional five-year period, to expire on December 21, 2009. This retention of jurisdiction shall be subject to any motion for an enlargement of time that may be made.

In order to minimize the time in which the Court may relinquish its jurisdiction over the present case, the Court will not certify the structural injunction issued this date for interlocutory appeal. Such an appeal would delay even further this already-protracted litigation. Nor will this Court entertain a motion for a stay of the injunction pending appeal.

VII. CONCLUSION

It may seem that the Court is of two minds in this opinion. On the one hand, the Court has chosen to adopt a modified version of Interior's accounting plan, rather than plaintiffs', as the basis for the historical accounting of the IIM trust fund. On the other hand, the Court has ordered substantial injunctive relief to ensure that the accounting will be carried out. The apparent contradiction is explained simply. It is not that the Court believes Interior is incapable of formulating an adequate plan for an accounting; rather, it is that the Court has no confidence that Interior is willing to actually implement an adequate accounting.

This statement requires explanation, as well as some qualification. As noted by the Court during the Phase 1.5 trial, the Reports of the Special Master in this litigation have included the highest praise for Associate Deputy Interior Secretary James Cason, commending him for his willingness to cooperate with the Special Master in attempting to correct information technology (IT) security problems affecting IIM trust data. Moreover, it is indeed true that during the recent trial, one of plaintiffs' expert witnesses agreed that at least one of Interior's Plans would be workable if implemented. Richard Fitzgerald, Acting Director of the newly-formed Office of Trust Regulations, Policies and Procedures at Interior, testified: "I think that plan that has been put together [i.e., Interior's Comprehensive Trust Management Plan] is a reasonable plan if it can be implemented." Tr., Day 6, PM session (May 8, 2003) at 41:9-10. However, Fitzgerald qualified his remarks by noting: "I think that we have moved in a good direction, but it has taken an awfully long time. And, you know, the old bank examiner in me, the old banker—keep[s] thinking about Pygmalion, you know, in this sense. Words, words, words. Show me. I don't see the performance yet. I see words." Id. at 64:11-16. Later, Fitzgerald also testified:

Tr., Day 8, AM session (May 12, 2003) at 37:6-19.

Interior has kept the conversation about historical accounting going for as long as possible. Over the decades, the Indians have heard plenty of words, words, words. As noted by the National Congress of American Indians:

Br. for Amicus Curiae National Congress of American Indians at 30-31 (internal citations omitted). Actually, reports of Interior's defective accounting procedures date back to at least 1915. In that year, the Joint Commission of the Congress of the United States to Investigate Indian Affairs received a report regarding "Business and Accounting Methods Employed in the Administration of the Office of Indian Affairs" (Defs.' Ex. 255) ("1915 Report"). Under the heading "Defects in Methods of Accounting and Reporting," the Joint Commission reported:

1915 Report at 78, 79.

On February 25, 1929, the Comptroller General of the United States transmitted to the U.S. Senate "A Report of the Amount of Funds of the Indians, the Investment Thereof, the Rate of Interest Thereon Together With Comments Pertinent to the Uses Made of Such Funds" (Defs.' Ex. 256) ("1929 Report"). Under the heading "Accounting System," the Comptroller General reported:

1929 Report at 116. In December of 1956, the Comptroller General submitted a report to the House Appropriations Committee entitled "Significant Findings Developed by the General Accounting Office During the Course of Audits and Other Examinations" (Defs.' Ex. 276) ("1956 Report"). Under the heading "Deficiencies in administration of individual Indian moneys," the Comptroller General reported:

1956 Report at 28.

In March of 1966, the Comptroller General issued a report to Congress entitled "Need for Improvements in the Management of Moneys Held in Trust for Indians." (Defs.' Ex. 277) ("1966 Report"). In a cover letter, the Comptroller General summarized his findings:

Letter from Frank H. Weitzel, Acting Comptroller General of the United States, to the President of the Senate and the Speaker of the House of Representatives (March 11, 1966) at 1, 2.

In 1982, the Comptroller General submitted a report to Congress entitled "Major Improvements Needed in the Bureau of Indian Affairs' Accounting System" (Defs.' Ex. 258) ("1982 Report"). On the first page of the report, the Comptroller General states:

1982 Report at i.

It is not just the legislative branch that has called attention to Interior's repeated failures, but also the judicial branch. As the D.C. Circuit noted in 2001,

Cobell VI, 240 F.3d at 1089-90 (citations omitted).

Yet, decade after decade, Interior's response to these concerns has been consistent —it has kept the conversation going with its critics in order to maximize the amount of time that would elapse before it would be obliged to take any real action. Even after the publication of the Misplaced Trust report in 1992, "[o]nce again the Interior Department pledged reforms; once again there was little improvement." Id. at 1090. This particular failure to take any action led Congress to conclude that legislative action would be necessary to compel Interior to comply with its fiduciary obligations to the American Indians. The Members who proposed the bill that became the 1994 Act specifically described Interior's modus operandi as forestalling action by pledging reform, then consistently failing to honor its pledges. For example, then-Congressman Craig Thomas (R-Wyo.) declared to the House Subcommittee on Environment, Energy, and Natural Resources:

140 CONG. REC. 27,243 (1994) (emphasis in original). The same year, Congressman Mike Synar (D-Okla.) informed the full House:

40 CONG. REC. 24,244 (1994).

Almost a decade later, little has changed. Interior continues to pile it on; the only difference is that instead of Congress, this Court is now its chosen receptacle. As demonstrated by the above-quoted statements, at every opportunity where Interior had to decide whether to honor the IIM beneficiaries' interests, it has decided that its own interests in administrative convenience took precedence. As testified by former Special Trustee Paul Homan:

Tr., Day 4, AM session (May 6, 2003) at 12:20—13:11. And as explained by Homan, the creation of an Office of the Special Trustee within Interior did little to compel the agency to take any real action to satisfy its trust responsibilities:

Tr., Day 6, AM session (May 8, 2003) at 12:23—13:6.

The results of Interior's failure to take its trust responsibilities seriously are plain today. Although they are citizens of the greatest and most prosperous nation in the world today, the beneficiaries of the IIM trust live under conditions that would not be alien to citizens of the poorest Third World nations. Many of them live in abject poverty.

On October 25 of this year, they will observe the ninth anniversary of the passage of the 1994 Act. One cannot say that the anniversary will be celebrated, for there is little to celebrate. In nine years, although Interior has paid lip service to the importance of trust management reform, it has taken barely any steps towards the performance of an historical accounting. Interior's promises that its implementation of the TAAMS computer system would allow it to satisfy its fiduciary obligations to the IIM beneficiaries have proven to be just as reliable as all of its other promises. Yet despite all of its broken promises that "we're working on the problem, really we are" and "[we're] really on top of this now," Interior presently insists that it really means it this time, now that it has filed its Plans with the Court, and therefore the Court should simply remand back to the agency. As noted above, however, the mere submission of Plans provides no assurance that Interior will actually abide by them. Indeed, the Plans have been very carefully drafted so that they create no legal obligation whatsoever on the part of Interior to do anything. Either they contain well-crafted legal disclaimers or they consistently employ the phrase "Interior plans to" or "Interior intends to" whenever actual measures are discussed.

In sum, Interior has cried wolf over and over and over again to the Indians, to Congress, and to the courts. To be sure, there has been some activity—most notably, the creation of a new alphabet soup of bureaucracies. But activity is not the same thing as progress. And Interior has not demonstrated that it has made any progress, either in complying with its obligation to conduct an accounting for the IIM beneficiaries or in complying with its other fiduciary obligations.75 On the subject of Interior's unjustified delay in achieving such progress, the D.C. Circuit has observed:

Cobell VI, 240 F.3d at 1097. Although nine years have elapsed since the passage of the 1994 Act, virtually all that Interior has to show are broken promises and plans that have never been implemented. At some point during a confidence game, all but the most credulous individuals realize that they are being duped, and stop playing. For the Court, that point has been reached.

What has become clear from Interior's repeated placement of its own interests ahead of the responsibilities that accompany its status as trustee-delegate is that it has failed to recognize a crucial fact about the IIM trust fund. The fund is not the government's money. It belongs to the beneficiaries. The trust fund is supposed to be administered in their best interest, and not simply in a manner that is most convenient to the government. Instead, throughout its management of the IIM trust fund, Interior has chosen to behave almost as though the IIM trust fund were a toy, one that it need not share with anyone else, one that it can abuse and mistreat if it wants to, and no one can tell it differently. The United States was founded upon the principle that its government derives its powers from the consent of the governed. But Interior has stood this proposition on its head. In its collective mind, its powers over the IIM trust fund are something to be assumed, and therefore it deems the beneficiaries to possess only the rights that Interior believes that they should have, and no more. When a government agency continually places its own interests ahead of the rights of the American citizens that it is entrusted to protect, something is gravely wrong.76

Yet even in the face of its continued refusal to comply with the clear directives of Congress and the courts to perform an adequate accounting and to bring its management of the IIM trust into compliance with its fiduciary duties, Interior insists that the sole remedial measure within the authority of this Court is to remand back to Interior. But Interior has directed this Court to no case law supporting the proposition that, having repeatedly refused to take measures to satisfy its fiduciary obligations to the IIM beneficiaries, this Court is impotent to afford any relief other than remanding to Interior, to give them yet another chance. Moreover, such a proposition flies in the face of the D.C. Circuit's instructions in this case:

Cobell VI, 240 F.3d at 1108 (citations and internal punctuation omitted).

The remedial power of the federal courts is an aspect of the "judicial power" bestowed upon them by the Framers in Article III of the Constitution. Remedies are the means by which substantive rights are given effect. Precisely two hundred years ago, the Supreme Court affirmed:

Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163, 166, 2 L.Ed. 60 (1803). Put more bluntly, a court judgment lacking a remedy to enforce it "nothing but a handsome piece of paper suitable for framing." DOUGLAS LAYCOCK, MODERN AMERICAN REMEDIES 775 (2002).

At the present juncture, the sole appropriate remedy for Interior's repeated violations of plaintiffs' vested legal rights is a structural injunction. If the Court were instead to remand to Interior, it will be easy to predict what the result would be. It was only two short years ago that Interior was repeatedly insisting to the D.C. Circuit that plaintiffs possessed no judicially-enforceable right to a historical accounting. See Cobell VI, 240 F.3d at 1094 ("Specifically, appellants take issue with the district courts finding of specific trust obligations, including a judicially enforceable duty to account..."), 1102 ("While appellants concede that some type of review of past transactions may indeed be necessary to accurately state opening balances, [they argue that] this does not mean that the plaintiffs have a judicially enforceable right to a complete historical accounting. Even were the plaintiffs entitled to such an accounting, appellants contend that the Interior Department, and not the court, would have the authority to determine the nature and scope of the accounting."), 1104 ("Appellants also argue that whatever right to an accounting plaintiffs may have, the district court erred insofar as it determined that such a right was judicially enforceable.") (citations and internal punctuation omitted).

What lies in store if this Court merely remands to Interior was foreshadowed in a recent statement by Interior's appellate counsel:

Tr. of Proceedings, Cobell v. Norton, U.S. Court of Appeals for the District of Columbia Circuit, April 24, 2003, Cir. No. 02-5374, at 8-9 (emphasis added).

In other words, if this Court simply remands to Interior, there will be no attempt to reform the trust, no attempt to "fix the system," only the performance of a so-called "accounting," the scope and nature of which have already been determined by Interior. At best—at the very best—in five years or so, Interior will send out statements to IIM account holders entitled "Historical Statements of Account." That is, to present account holders—Interior will ignore all accounts closed on or before October 25, 1994. The statements will not include transactions in any account that occurred between 1887-1934. Nor, except for a limited sample, will Interior verify any transactions with a value of less than $5000 by matching them against supporting documentation. Instead, the statements will inform account holders that a paid contractor of Interior—no representatives of which have ever testified as witnesses in this litigation—utilized a statistical sampling procedure with respect to these accounts. The statements will proudly report that after utilizing this procedure, Interior's paid contractor determined that all transactions in the IIM trust fund with a value of less than $5000 were 99% accurate. Interior will then inform this Court that it has fully satisfied its duty to account to the IIM beneficiaries for the years 1887-2000.

In sum, if the sole remedy possessed by this Court is to remand to Interior, it may as well dismiss this case with prejudice. The end result will be essentially the same. For Interior's insistence that the only avenue available to this Court is to remand to Interior is tantamount to an assertion that Interior, and only Interior, possesses the authority to determine whether its proposed accounting complies with existing law. But this has never been the manner in which our constitutional government works. Aside from the rare case involving a "political question," it is the task of the judicial branch to say what the law is, as affirmed by the Supreme Court in United States v. Nixon:

Nixon, 418 U.S. at 704-05, 94 S.Ct. 3090 (citations and internal punctuation omitted). The executive branch has the ability to decide, in the first instance, whether a course of action by one of its agencies complies with the law. But then, unless the action involves one of those rare issues whose legality is solely committed to the discretion of the executive branch (a "political question") or the challenge to the action is otherwise non-justiciable (e.g., because the parties lack standing or seek an advisory opinion), then it is the task of the courts to say what the law is. Nor are the courts limited to issuing declaratory judgments; rather, they possess the authority to take remedial steps that are necessary to give effect to their judgments. This is true even when an executive official claims, as in Nixon, that the matter is as sensitive or "internal" as the privileged status of private communications between the President and his subordinates. Moreover, the D.C. Circuit has recognized that, in the present case, the administrative discretion of Interior is particularly limited:

Cobell VI, 240 F.3d at 1099 (internal citations and punctuation omitted).

If this Court were to refuse to issue an appropriate remedy, one that is necessary to give effect to its legal judgments, it would be abdicating its judicial responsibilities. History has previously demonstrated the consequences of the courts' failure to take remedial measures necessary to prevent the executive branch from violating the fundamental rights enjoyed by American Indians. As noted above, in 1832, Chief Justice John Marshall held that the Cherokee nation was "a distinct community, occupying its own territory, ... in which the laws of Georgia can have no force, and which the citizens of Georgia have no right to enter, but with the assent of the Cherokees themselves...." Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 561, 8 L.Ed. 483 (1832). But when President Andrew Jackson learned of the decision, he is said to have retorted: "Well, John Marshall has made his decision—now let him enforce it." Jackson's response proved prophetic: Marshall failed to provide any relief to enforce the rights of the Cherokee nation, and the decision was ignored. The consequences of the Court's failure to take remedial steps to give effect to the Tribe's rights were soon and swift: the Cherokees were forcibly removed from their native lands, soon to be followed by the rest of the Tribes dwelling east of the Mississippi River.

The IIM beneficiaries are not faced with the prospect of removal from their lands. But if this Court fails to provide an adequate remedy to enforce the rights that both Congress and the courts have determined them to possess, those rights will be ignored. And in a larger sense, if the federal courts refuse to afford relief necessary to give effect to their judgments, they undermine the integrity of the judicial branch. A half-century ago, Justice Robert Jackson observed: "If not good law, there was worldly wisdom in the maxim attributed to Napoleon that `The tools belong to the man who can use them.' We may say that power to legislate for emergencies belongs in the hands of Congress, but only Congress itself can prevent power from slipping through its fingers." Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 654, 72 S.Ct. 863, 96 L.Ed. 1153 (1952) (Jackson, J., concurring). As with Congress, so with the courts: if the judicial branch fails to take steps to preserve the power entrusted to it by the Framers of the Constitution, that power will slip through its fingers.

That the Framers understood this is clear from Alexander Hamilton's declaration that an "independent spirit in the judges" was "requisite to guard the Constitution and the rights of individuals from ... dangerous innovations in the government, and serious oppressions of the minor party in the community." THE FEDERALIST No. 78, at 469 (Alexander Hamilton) (Clinton Rossiter ed., 1961). The rise of the modern administrative state has only affirmed Hamilton's words. Regarding the necessity of judicial checks on executive agency actions, the D.C. Circuit has observed: "Congress has been willing to delegate its legislative powers broadly—and courts have upheld such delegation—because there is court review to assure that the agency exercises the delegated power within statutory limits." Farmers Union Cent. Exchange, Inc. v. FERC, 734 F.2d 1486, 1501 (D.C.Cir.1984) (citation omitted).77

The Court will therefore not simply remand to Interior, hoping beyond hope that the agency has mended its ways and will give full effect to the judgments of this Court. As the D.C. Circuit has stated in another institutional reform case, "[w]hen defendants are shown to have settled into a continuing practice ... courts will not assume that it has been abandoned without clear proof. It is the duty of the courts to beware of efforts to defeat injunctive relief by protestations of repentance and reform, especially when abandonment seems timed to anticipate suit, and there is probability of resumption." Campbell v. McGruder, 580 F.2d 521, 541 (D.C.Cir.1978) (citing Local 167 of Int'l Brotherhood of Teamsters, Chauffeurs, Stablemen & Helpers of America v. United States, 291 U.S. 293, 298, 54 S.Ct. 396, 78 L.Ed. 804 (1934) and United States v. Oregon State Medical Society, 343 U.S. 326, 333, 72 S.Ct. 690, 96 L.Ed. 978 (1952)). The recent flurry of activity at Interior with respect to the IIM trust may be ascribed to the simple fact that its management of the trust is presently under a great deal of public scrutiny. Once that scrutiny wanes, however, and the public's attention is focused elsewhere, Interior will be free to resume its continuing practice of evading its fiduciary obligations to the IIM beneficiaries. There is no evidence that it has abandoned this practice. A June 2002 report issued by Interior's Inspector General regarding the present litigation concluded:

U.S. Dep't of Interior, Office of Inspector General, Report: Allegations Concerning Conduct of Department of the Interior Employees Involved in Various Aspects of the Cobell Litigation, June 2002, at 2, 6.

The "bunker mentality" identified by Interior's Inspector General—protect one's own bureau first; then Interior as a whole; protect the public interest last of all—was clearly demonstrated only recently. Less than two months before Interior's Deputy Secretary was telling Congress that the IIM beneficiaries' claims were wholly meritless, and that the sole reason that this litigation was brought was to enrich lawyers and accountants, Interior filed a summary judgment motion with this Court arguing that, in fact, plaintiffs' claims should have been filed long ago. Interior urged this Court to conclude that plaintiffs were on notice of Interior's mismanagement of their trust funds decades ago, and to conclude that Interior should thereby be relieved of any obligation to account for IIM account transactions that occurred before October 1, 1984, on statute of limitations and laches grounds. Interior declined to explain how permitting it to ignore all transactions before 1984 could be reconciled with the following determination by the D.C. Circuit: "Appellants never explain how one can give a fair and accurate accounting of all accounts without first reconciling the accounts, taking into account past deposits, withdrawals, and accruals. Indeed, the government's own expert acknowledged that one could not determine an accurate account balance without confirming historical account balances." Cobell VI, 240 F.3d at 1102 (emphasis in original). Nor did Interior deign to mention the fact that in July of 2002, by a vote of 281-144, Congress overwhelmingly rejected a bill limiting Interior's obligation to perform an accounting of the IIM trust fund to transactions occurring after the year 1985. But the message to this Court was clear: Interior will continue to employ any measure at its disposal that might possibly allow it to shirk its fiduciary obligations to the IIM beneficiaries.78

How very different the Department of the Treasury. Because it is also a trustee-delegate for the IIM trust fund, the Secretary of the Treasury is a co-defendant in this litigation. When plaintiffs initiated this suit in 1996, Treasury fought hard to defend itself against their claims. In 1999, this Court held Treasury Secretary Rubin in contempt for Treasury's failure to comply with discovery orders. But when this Court issued its opinion on liability in 1999, Treasury decided that instead of defying the orders of this Court, it would honor its obligations to the IIM beneficiaries. Since then, Treasury has been outstanding in taking steps to purge itself of its contempt citation, so much so that it has been easy for this Court to forget that Treasury is a defendant in this action. Even plaintiffs' lead counsel, who is hardly renowned for complimenting defendants, acknowledged during his closing argument in the Phase 1.5 trial: "Treasury has distinguished itself. At the outset, Treasury fought very hard about being a true defendant in this case. They took rational positions, they made the best arguments they could, they lost, and then they took what this Court ordered to heart. They made the changes.... [Assistant Treasury Secretary Donald Hammond] also stated whatever this Court expects Treasury to do, Treasury will do it." Tr., Day 44, AM session (July 8, 2003) at 12:19-24, 13:19-20 (statement of Dennis Gingold).79

Treasury's success in satisfying its legal obligations to the IIM beneficiaries demonstrates to this Court that the past failures of Interior cannot simply be ascribed to the bureaucratic inertia that affects all administrative agencies. The past is gone, however, and this Court recognizes that Interior can no more undo its past actions than this Court can unwrite its past opinions.80 But Interior has an unprecedented opportunity within its grasp: to take real steps now to redress some of the harm that has been inflicted against some of this nation's most impoverished citizens, and to take real measures that will improve the quality of their lives. Its choice is clear. It can decide to comply with the mandates of Congress and the courts that spell out its fiduciary obligations to the individual Indian beneficiaries, and take real action to mend the breaches of trust that have marred the past management of the IIM trust fund. Or it can continue along its present path. The choice is completely within Interior's hands.

An order will issue this date consistent with the foregoing memorandum opinion.

MEMORANDUM OPINION

("Fixing the System")

                                 Table of Contents

  I. Procedural Introduction .................................................. 240

 II. Interior's Comprehensive Plan ............................................ 245
     A. Introduction .......................................................... 245
     B. Strategic Direction ................................................... 245
     C. Business Objectives and Business Profile .............................. 246
     D. Organizational Realignment ............................................ 248
     E. Transformation Activities ............................................. 249
     F. Trust Reengineering ................................................... 250
     G. Conclusion ............................................................ 252

III. Plaintiffs' Response ..................................................... 252
     A. Plaintiffs' Opposition Brief .......................................... 252
     B. Plaintiffs' Proposed Alternative Plan ................................. 252

 IV. The Interests of the American Indian Tribes .............................. 256
     A. Introduction .......................................................... 256
     B. Clear and Enforceable Standards for Trust Management .................. 257
        1. Testimony of Professor Langbein .................................... 258
        2. The Fiduciary Duties Owed to the IIM Beneficiaries ................. 267
           a. Duty to Administer the Trust .................................... 267
           b. Duty of Loyalty ................................................. 268
           c. Duty Not to Delegate ............................................ 268
           d. Duty to Keep and Render Accounts ................................ 268
           e. Duty to Furnish Information ..................................... 268

           f. Duty to Exercise Reasonable Care and Skill ...................... 269
           g. Duty to Take and Keep Control ................................... 270
           h. Duty to Preserve the Trust Property ............................. 270
           i. Duty to Enforce Claims and Defend Actions ....................... 270
           j. Duty to Keep Trust Property Separate ............................ 271
           k. Duty with Respect to Bank Deposits .............................. 271
           l. Duty to Make the Trust Property Productive ...................... 271
           m. Duty to Pay Income to Beneficiaries ............................. 271
           n. Duty to Deal Impartially with Beneficiaries ..................... 271
           o. Duty with Respect to Co-Trustees ................................ 271
           p. Duty with Respect to Person Holding Power of Control ............ 271
        3. Recommendations .................................................... 271
     C. Protection of Tribal Authority and Sovereignty ........................ 273
     D. No Redirection of Funds for BIA Services .............................. 275
     E. Increased Tribal Control over Land and Resources ...................... 276
     F. Involvement of Tribal Governments ..................................... 277
     G. Core Systems .......................................................... 278

  V. Conclusion ............................................................... 280

This is the second of two memorandum opinions issued this date following a forty-four day bench trial. The first opinion dealt with the further relief ordered by this Court relating to the historical accounting owed by defendants to plaintiffs. The present opinion discusses the further relief ordered by the Court relating to the obligation of the Interior defendants to bring themselves into compliance with the fiduciary duties owed to plaintiffs as the trustee-delegate of the United States for the individual Indian money (IIM) trust.

I. PROCEDURAL INTRODUCTION1

On October 25, 1994, Congress passed the American Indian Trust Management Reform Act ("the 1994 Act"). The Act established the Office of the Special Trustee for American Indians within the U.S. Department of the Interior. 25 U.S.C. § 4042. It also directed the Special Trustee to

25 U.S.C. § 4043(a)(1).

In accordance with this provision, the Special Trustee submitted a strategic plan to Interior Secretary Bruce Babbitt and Congress in April of 1997. After reviewing the Special Trustee's strategic plan, Secretary Babbitt issued his own plan in July of 1998, which is known as the High Level Implementation Plan ("HLIP"). The HLIP consisted of twelve subprojects, with a focus on ensuring the accuracy of data retained by Interior regarding the IIM trust fund and developing uniform policies and procedures to guide trust management in the future.2

Meanwhile, on June 10, 1996, the named plaintiffs commenced the present action against the Secretary of the Interior and other federal officials, alleging that the mismanagement of the IIM trust by the Interior and Treasury departments constituted a breach of their fiduciary duties to plaintiffs. On May 5, 1998, the Court bifurcated this action into two distinct phases. Phase I of the litigation, also known as the "fixing the system" phase, would focus on the reforms instigated by defendants to bring the management of the IIM trust into compliance with their fiduciary obligations. This phase is forward-looking, in that it attempts to discern whether defendants have reformed the management of the IIM trust in such a way that will ensure that the United States will honor its fiduciary obligations to the Indian beneficiaries in the future. Phase II, also known as the "historical accounting phase," would focus on the performance of a formal accounting of the IIM trust, as required by the 1994 Act. This phase is backward-looking, in that it attempts to discern whether and to what extent the United States has honored its fiduciary obligations to the Indian beneficiaries from the inception of the trust until the present date.

In 1999, the Court conducted a six-week bench trial addressing plaintiffs' Phase I claims. During the trial, Interior introduced the HLIP into evidence in order to demonstrate that it was taking steps to bring itself into compliance with its fiduciary obligations to the IIM beneficiaries. On December 21, 1999, the Court issued a memorandum opinion containing detailed factual findings and conclusions of law. Cobell v. Babbitt, 91 F.Supp.2d 1 (D.D.C. 1999) ("Cobell V"). The Court determined that

Id. at 54.

On September 17, 2002, following a twenty-nine day bench trial, this Court issued a memorandum opinion finding Interior Secretary Gale Norton and Assistant Interior Secretary of Indian Affairs Neal McCaleb to be in civil contempt of court, in their official capacities, with respect to five specifications.3 The opinion also explained the necessity for considering further injunctive relief beyond that imposed in the Court's December 21, 1999 opinion:

Cobell v. Norton, 226 F.Supp.2d 1, 147-48 ("Cobell VII") (internal citations and quotation marks omitted).

In light of its conclusion to consider further injunctive relief, the Court scheduled further proceedings to determine whether such additional relief was warranted and, if so, to determine the nature and extent of such relief. Because the Court had already conducted a Phase I trial, and because the time was not ripe to conduct a hearing on Phase II of the litigation, the Court designated these proceedings "the Phase 1.5 Trial," in order to stress their nature as an interim stage of this litigation. It explained that this trial would "encompass additional remedies with respect to the fixing the system portion of this case and approving an approach to conducting a historical accounting of the IIM trust accounts." Id. at 162. Specifically, the Court explained that it planned to enter a structural injunction in this case. Id. at 147 n. 154.

The Court directed the Interior defendants to submit two plans to the Court: (1) a plan for conducting a historical accounting of the IIM trust accounts, and (2) a plan for bringing themselves into compliance with the fiduciary obligations owed to the IIM trust beneficiaries. It stressed that these plans should "describe, in detail, the standards by which they intend to administer the IIM trust accounts, and how their proposed actions would bring them into compliance with those standards." Id. at 148-49. The Court also granted the Treasury Department and plaintiffs leave to file any plan or plans of their own regarding these matters.

On January 6, 2003, the Interior defendants and plaintiffs each submitted two plans to this Court. Interior's Plan for bringing itself into compliance with its fiduciary obligations to the IIM beneficiaries was entitled "Department of the Interior Fiduciary Obligations Compliance Plan" (Defs.' Ex. 1). The plaintiffs' alternative plan was entitled "Plaintiffs' Compliance Action Plan Together with Applicable Trust Standards" (Pls.' Ex. 51).

Interior submitted an additional Plan on March 28, 2003 entitled "Department of the Interior Comprehensive Trust Management Plan" ("the Comprehensive Plan") (Defs.' Ex. 27).4 As explained by Special Trustee Ross Swimmer during the Phase 1.5 trial, the Comprehensive Plan is intended to replace the HLIP as Interior's comprehensive plan for bringing its management of both the IIM trust and Tribal trusts into compliance with its fiduciary obligations to the beneficiaries of those trusts:

Tr., Day 36, PM session (June 25, 2003) at 31:23—32:19. At the Court's request, Special Trustee Swimmer demonstrated for the Court the portions of the Comprehensive Plan that corresponded to the twelve subprojects of the HLIP. See Defs.' Ex. 316.

When asked why the Comprehensive Plan had not been filed on January 6, 2003, Special Trustee Swimmer explained: "We were well along on the Comprehensive Trust Management Plan when we were asked by the court to file a fiduciary compliance plan. We more or less broke off from the Comprehensive Trust Management Plan to complete that portion of the work that would deal with the trust funds, which is what we felt our responsibility to report to the court on how we would bring our trust fund management into compliance." Tr., Day 25, PM session (June 25, 2003) at 48:12-19. Once again, Interior did not follow the Court's instructions. The Court's order of September 17, 2002 included the following provision:

Cobell VII, 226 F.Supp.2d at 162. Interior was thus ordered to submit a plan "for bringing themselves into compliance with the fiduciary obligations that they owe to the IIM beneficiaries." The order was not restricted to the submission of a plan for Interior to bring itself into compliance with the fiduciary obligations owed to the IIM beneficiaries merely with respect to the funds in the IIM trust or the accounts in the IIM trust, as opposed to the assets of the IIM trust. Instead, the Court directed Interior to submit a plan to bring itself into compliance with the fiduciary obligations it owes, as the trustee-delegate of the United States, to the beneficiaries of the IIM trust. Indeed, the Court specifically noted that a description of the standards by which Interior intended to administer the IIM accounts, and of how its proposed actions would bring itself into compliance with those standards was merely a "part of this plan," not the plan itself. If Interior considered the order to be unclear or ambiguous, it should have sought clarification from the Court. Instead, in an arrogant and contemptuous manner, Interior improperly misconstrued the Court's order of September 17, 2002.

Nevertheless, the issue has been effectively mooted by Interior's subsequent filing of the Comprehensive Plan, which purports to be a plan for Interior to bring itself into compliance with all of the fiduciary obligations it owes to the beneficiaries of the IIM trust. Accordingly, the Court will treat the Comprehensive Plan as Interior's plan to bring itself into compliance with its fiduciary obligations to the IIM beneficiaries.5

On March 3, 2003, the Court granted leave for the National Congress of American Indians ("NCAI") to file an amicus curiae brief with this Court. The NCAI, which represents the interests of over 250 American Indian tribes and Alaska Native villages, filed its brief the same day.6

The Phase 1.5 Trial began on May 1, 2003 and ended on July 8, 2003. The Court heard forty-four days of testimony and received over 500 exhibits into evidence from both parties. Proposed findings of fact and conclusions of law were submitted by both parties on August 4, 2003. On August 27, 2003, the Court granted leave for NCAI to file a second amicus brief with this Court, which was filed the same day. Interior filed a brief in response to the second amicus brief on September 8, 2003.

The Court has weighed all of the evidence presented and fully reviewed the arguments presented by the parties. After analyzing the Plans submitted by the parties and the amici curiae briefs submitted by NCAI, the Court hereby enters these findings of fact and conclusions of law.

II. INTERIOR'S COMPREHENSIVE PLAN

A. Introduction

Interior's Comprehensive Plan is divided into seven chapters: Introduction, Strategic Direction, Business Objectives and Business Profile, Organizational Realignment, Transformation Activities, Trust Reengineering, and Conclusion. The Court will examine each of these chapters separately.

The introductory chapter notes that Interior is "committed to implementing the actions described in this Comprehensive Trust Management Plan." Interior's Comprehensive Plan at 1-1. It provides a brief overview of the history of the IIM trust. It notes that in 1975, Congress passed the Indian Self-Determination and Assistance Act of 1975, Public Law 93-638, codified as amended at 25 U.S.C. §§ 450-458bbb-2 ("Self-Determination Act"). The Self-Determination Act directed the federal government to ensure "maximum Indian participation in the direction, planning, conduct, and administration of educational as well as other federal programs and services to Indian communities so as to render such programs and services more responsive to the needs and desires of those communities." Interior's Comprehensive Plan at 1-5. Interior also notes that Congress subsequently enacted additional laws affording Tribes an even greater degree of autonomy in the management of Tribal trust assets and federal funds spent on behalf of the Tribes.

B. Strategic Direction

The second chapter of Interior's Comprehensive Plan is described as presenting a "strategic direction and goals for Indian trust management... emphasiz[ing] achievement of results and set[ting] the strategy for achieving improvements in comprehensive trust management." Id. at 1-2. It opens with Interior's mission statement for Indian trust management: "To perform our fiduciary trust responsibilities to American Indian tribes, individual Indians, and Alaska Natives by incorporating a beneficiary focus and beneficiary participation while providing effective, competent stewardship and management of trust assets." Id. at 2-2. After listing thirteen principles of guidance for discharging Interior's trust responsibilities, the Plan lists six "strategic goals":

Id. at 2-6 (footnotes omitted).

C. Business Objectives and Business Profile

The third chapter of Interior's Plan "examines trust management as a business." Id. at 1-2. It begins by listing twenty-six "business objectives" intended to achieve the strategic goals identified in the previous chapter. The Plan then "summarizes the business profile, identifies the business lines, and lays the foundation for the new mode of operations as defined by the business environment model and the service delivery model." Id. at 3-1.

The Plan's "business profile" consists of a list of "key stakeholders involved in producing trust management services." Id. at 3-12. In a table reproduced below, the Plan "further defines the future relationship of each stakeholder to trust management":

---------------------------------------------------------------------------------------------------
Stakeholder              Role as identified in the business environment model
---------------------------------------------------------------------------------------------------
Trustee: Congress7  Congress enacts statutes and provides funding. Through the 1994
                         Reform Act, it established standards for trust management. It
                         receives periodic reports on the implementation of trust management
                         programs.
---------------------------------------------------------------------------------------------------
Trustee Designate:       The Secretary provides overall trust direction and principles. The
Office of the            Secretary receives status updates on reform efforts and reports on
Secretary                implementation of programs.
---------------------------------------------------------------------------------------------------
Beneficiaries            Beneficiaries request fiduciary trust services and receive fiduciary
                         trust representation, advice and counsel, information, and payments.
                         They provide lease approvals and information, such as
                         address changes, ownership changes, and family updates.
---------------------------------------------------------------------------------------------------
Custodians               Custodians are financial institutions that settle trades, collect income,
                         and hold securities.
---------------------------------------------------------------------------------------------------
Department of            Treasury provides financial services. Lease revenues are submitted
the Treasury             to Treasury through various DOI agencies, including MMS,
                         BIA, OST, and tribes under compact and contract.
---------------------------------------------------------------------------------------------------
Lessees                  Lessees lease Indian lands. BIA executes and manages the leases.
                         OST accounts for, invests, and disburses income from leases.
                         Funds are held in Treasury.
---------------------------------------------------------------------------------------------------

Office of the        Office of the Solicitor provides legal counsel to DOI agencies and
Solicitor            participates in probate for members of the Five Civilized Tribes.
----------------------------------------------------------------------------------------------
Office of the        OST provides financial management and disbursement, beneficiary
Special Trustee for  trust services, and representation for individual Indians and Indian
American             tribes. OST oversees DOI performance of trust management.
Indians (OST)
----------------------------------------------------------------------------------------------
Bureau of            BIA provides stewardship and management of land and natural
Indian Affairs       resources for individual Indians and Indian tribes. BIA handles
(BIA)                small, noncomplex probate cases internally. BIA also maintains
                     land title ownership information.
----------------------------------------------------------------------------------------------
Minerals             MMS collects and verifies mineral lease revenue and performs
Management           mineral compliance audits. It deposits revenue with the Federal
Service (MMS)        Reserve Bank and posts the data with Treasury, notifies OST for
                     investment purposes, and provides lease-level data to BIA to convert
                     to individual and/or tribal ownership information and ultimate
                     disbursement to beneficiaries.
----------------------------------------------------------------------------------------------
Bureau of Land       BLM conducts and submits mineral appraisals, leasing compliance,
Management           and contracts for cadastral surveys to BIA as required by law.
(BLM)
----------------------------------------------------------------------------------------------
Office of            Complex probate cases go to OHA for an order determining heirs
Hearings and         and distribution. When a decision is final, estate distribution
Appeals (OHA)        involving ownership information is forwarded to BIA.
----------------------------------------------------------------------------------------------
Office of            OSM directly regulates all coal mining and reclamation operations
Surface Mining       on Indian lands under the Indian Land Program Regulations. As
(OSM)                the regulatory authority, OSM reviews and approves mining permits
                     and conducts inspection and enforcement activities on Indian
                     lands.
----------------------------------------------------------------------------------------------
State                State, counties, and cities review and comment on trust land acquisition.
Counties             Trust land within their jurisdictions impacts them through
Cities               changes to the tax base and law enforcement jurisdiction.
Taxpayers
----------------------------------------------------------------------------------------------
Individual and       The associations and interest groups provide insight to Indian
tribal Indian        requirements, needs, and expectations. DOI maintains public relations
associations         with associations, interest groups, and lobbyists to foster
and interest         communication with the beneficiaries.
groups
---------------------------------------------------------------------------------------------

Id. at 3-17 to 3-18 (footnote added). The Plan next identifies three "distinct business lines," each representing "a distinct group of products or services for comprehensive trust management and encompass[ing] related processes, products, and services within its scope," and consisting of "common business processes focused on a particular activity." Id. at 3-18. The three business lines are defined as follows:

Id. After describing the products and services provided through each business line, the Plan next provides a "future service delivery model." This model "identifies the new mode of comprehensive trust management business operations," and describes the respective roles of the Office of the Special Trustee (OST) and the Bureau of Indian Affairs in such operations. Id. at 3-22.

Section 3.6 of the Plan is entitled "Fiduciary Obligations and Requirements." The Plan asserts that "Interior has examined the requirements applicable to administration of the Individual Indian Monies (IIM) accounts. The primary accounting requirements that Interior must meet is set by the 1994 Act. The Act specifically describes the accounting duties owed by DOI to tribes and individual Indians." Id. at 3-27. After listing the relevant portions of the 1994 Act, the Plan states that

Id. at 3-28. In subsection 3.6.2, which is entitled "Fiduciary Trust Management Requirements," the Plan explains that

Id. The Plan then provides a three-page table listing "some of [the] requirements that may contain provisions affecting the trust management business lines." Id. The reader is then directed to Appendix C of the Plan, which groups the various requirements listed in the table under the business line that they potentially affect.

D. Organizational Realignment

The fourth chapter of the Plan "presents the organizational redesign needed to support the new service delivery model." Id. at 1-3. This chapter sets forth a proposed reorganization of Interior that is described as "vital to [Interior's] multifaceted approach to trust reform." Id. at 4-2. The Plan represents that the result of this reorganization will be to "enhance benefits to trust beneficiaries in the following ways":

Id. at 4-2 to 4-3.

The decision to reorganize was apparently prompted by the recommendations of a "Joint DOI/Tribal Leaders Task Force" in December of 2002. This task force

Id. at 4-3. The remainder of the chapter describes the proposed reorganization in greater detail. The primary focus of the reorganization is upon "four primary offices within [Interior that] are critical to reforming comprehensive trust management," the Office of the Assistant Secretary of Indian Affairs; the Office of the Assistant Secretary of Land and Minerals Management; the Office of the Assistant Secretary for Policy, Management and Budget; and the Office of the Special Trustee. Id. at 4-5. The reader is also directed to Appendix D, which provides a table identifying the key roles and responsibilities of bureaus and offices within Interior following the proposed reorganization.

E. Transformation Activities

The fifth chapter "describes the transformation activities required to achieve comprehensive trust management as defined in the previous chapters." Id. at 5-1. Specifically, it lists six "major project components" under which each of the individual activities may be grouped, provides a "project schedule," and lists eight "major risks" anticipated to arise during the implementation process.

The six project components are (1) project planning and management, (2) change/risk management, (3) creation of a vision and strategic plan, (4) organizational development and realignment, (5) trust reengineering, and (6) establishment of a performance management program. Id. at 5-2 to 5-3. Each of these six components are defined, and individual tasks are listed as falling within the purview of each component. The fifth component, trust reengineering, is described at greater length in the Plan's sixth chapter, discussed infra.

The Plan provides a "project schedule" for each of the tasks falling under the purview of the six components. However, this schedule contains no deadlines; instead, it simply describes the status of various tasks as either "completed," "on-going," or "in-process." Moreover, approximately half of the enumerated tasks are not accompanied by one of these three status designations.

Finally, the chapter lists eight major risks expected to be encountered during the implementation process of the "modernization plan":

Id. at 5-13 to 5-14. A table identifies the potential impact and likelihood of occurrence of each of these eight risks as "low," "medium," or "high." The table also provides a paragraph-length "mitigation strategy" and "project action" for coping with each of the eight identified risks.

F. Trust Reengineering

The Plan's sixth chapter describes in further detail one of the six major project components identified in the previous chapter: trust reengineering. The chapter describes the creation of two models for trust management: the "As-Is Model" and the "To-Be Model."

The As-Is Model is a massive document that was filed with the Court on May 1, 2003. The Plan describes the purpose of the As-Is Model as "establish[ing] a comprehensive understanding of how trust operations are conducted currently." Id. at 6-3. The As-Is Model identifies and analyzes "eight core processes" of trust management: (1) Probate, (2) Title Services, Acquisition & Disposal, (3) Beneficiary Services, (4) Appraisal, (5) Surface Asset Management, (6) Subsurface Asset Management, (7) Accounting Management, and (8) Cadastral Survey Services. See As-Is Trust Business Model Report at ii-v. The Plan states that the As-Is Model is the result of a yearlong effort beginning in February 2002 and ending in February 2003. Interior's Comprehensive Plan at 6-3.

Unlike the As-Is Model, which is intended to describe how trust management is currently conducted, the stated purpose of the To-Be Model is to provide a comprehensive statement of the manner in which trust management will be conducted after Interior's proposed internal changes. As described by the Plan, the To-Be Model represents "the new integrated transformational design for trust management within DOI. The To-Be model will not only encompass reengineering and designing new Trust business processes; it will also include coordinated improvements and requirements in supporting systems, organizations, training, and personnel requirements, combined with an internal and external communication plan." Id. During the Phase 1.5 trial, Special Trustee Swimmer provided an approximate timeline for implementation of the To-Be Model:

Tr., Day 36, PM session (June 25, 2003) at 47:11-14, 47:17—48:3.8

Swimmer also testified that the completed To-Be Model would include deadlines for "milestones" to be achieved in the implementation of the To-Be Model:

Tr., Day 36, PM session (June 25, 2003) at 39:2-24.

G. Conclusion

The final chapter of the Plan provides a one-page synopsis of the Plan's goals. It also states that the implementation of the Plan will take approximately fourteen months after the To-Be Model is completed. Interior's Comprehensive Plan at 7-3. After the Plan is implemented, "the reen-gineered processes will take effect and the applicable technology, policies and procedures, guidelines and handbooks will be developed. At that time it may become reasonable to forecast a date for the termination of the Office of the Special Trustee." Id.

Before determining whether to adopt Interior's Comprehensive Plan, the Court will analyze both plaintiffs' responses and the critique of the Plan contained in NCAI's amici briefs.9

III. PLAINTIFFS' RESPONSE

A. Plaintiffs' Opposition Brief

On January 31, 2003, plaintiffs submitted a brief in opposition to Interior's January 6, 2003 Compliance Plan. Plaintiffs first observed that Interior's Plan purported only to state how Interior intended to bring itself into compliance "with certain fiduciary obligations" to the IIM beneficiaries. Pls.' Opp. to the "Fiduciary Obligations Compliance Plan" of Interior Secretary Gale Norton and Acting Assistant Secretary Aureen [sic] Martin at 2-3 ("Pls.' Opp. Br."). As noted above, however, this problem has been effectively remedied by the subsequent filing of Interior's Comprehensive Plan, which purports to be a plan for Interior to bring itself into compliance with all of the fiduciary obligations it owes to the beneficiaries of the IIM trust.

Plaintiffs also observe that "[n]owhere in [Interior's] Plan are common law standards and duties addressed." Id. at 6. They note that this omission appears to run counter to the admonition of the D.C. Circuit that "[c]ourts must infer that Congress intended to impose on trustees traditional fiduciary duties unless Congress has unequivocally expressed an intent to the contrary. Much as the Supreme Court has regularly turned to the Restatement and other authorities to construe trust responsibilities, it is appropriate for the district court to consult similar sources." Cobell v. Norton, 240 F.3d 1081, 1099 (D.C.Cir.2001) ("Cobell VI") (internal citation and punctuation omitted).

B. Plaintiffs' Proposed Alternative Plan

As noted above, on September 17, 2002, this Court granted plaintiffs leave to file a plan of their own to bring Interior into compliance with the fiduciary obligations it owes to the IIM beneficiaries. The plaintiffs' plan, filed on January 6, 2003, begins by identifying eight duties traditionally imposed upon trustees at common law. Plaintiffs' Compliance Action Plan Together with Applicable Trust Standards ("Plaintiffs' Compliance Plan") at 16-26. These are the duties of loyalty, administration, impartiality, prudent investment, control and protection of the trust property, keeping property separate and maintaining adequate records, enforcing and defending claims against the trust, and furnishing information. Plaintiffs observe that the provisions of the 1994 Act are not inconsistent with these duties. Id. at 26-29.

Additionally, plaintiffs cite Secretarial Order No. 3215, which was issued by former Interior Secretary Bruce Babbitt on April 28, 2000. Secretary Babbitt explained that the purpose of the order, which is entitled "Principles for the Discharge of the Secretary's Trust Responsibility," was

U.S. Dep't of Interior, Office of the Sec'y, Order No. 3215 (April 28, 2000), available at http://elips.doi.gov/elips/sec_orders/html_orders/3215.htm. While noting that the 1994 Act had provided "[t]he most comprehensive and informative legislative statement of Secretarial duties in regard to the trust responsibility of the United States," the order nevertheless acknowledged:

Id. (quoted in Plaintiffs' Compliance Plan at 29).10

The November 21, 1978 letter referred to is addressed to Assistant Attorney General James Moorman from Interior Solicitor Leo Krulitz. Solicitor Krulitz explained to the assistant attorney general that the purpose of the letter was to "set forth ... this Department's view of the legal obligations of the United States, as defined by the courts, with respect to Indian property interests." Letter from Interior Solicitor Leo Krulitz to Assistant Attorney General James Moorman 1 (Nov. 21, 1978) ("Krulitz Letter") (Pls.' Ex. 88). He then summarized his legal conclusions:

Id. at 2 (emphasis added). Notably, Solicitor Krulitz observed that "the decided cases strongly suggest that the trust obligation of the United States exists apart from specific statutes, treaties or agreements." Id. at 9 (citing cases).

Plaintiffs also cite an April 3, 1996 memorandum from Associate Interior Solicitor Robert Anderson to Special Trustee Paul Homan regarding "Legal Issues Pertaining to DOI's Trust Fund Management Responsibilities and OST Reform Efforts." Memorandum from Associate Interior Solicitor Robert Anderson to Special Trustee Paul Homan 1 (April 3, 1996) ("Anderson Memorandum") (Pls.' Ex. 60). Anderson explained that his purpose in drafting the memorandum was to respond to three questions that Special Trustee Homan had directed to the Solicitor's Office. Homan's third question was: "Please provide me with a list of the Secretary's trust responsibilities to Indian tribes and individual Indians with cites to relevant statutes, regulations, rulings and any other information that may be useful on this subject. In answering this please summarize what the [Office of the Solicitor] considers the specific applicable fiduciary standard to be in each circumstance." Id. at 9 (internal citation omitted). Anderson began his response by observing:

Id. (citation omitted). Anderson continued:

Id. at 13 (citations omitted). Anderson then concluded:

Id. at 14 (citations omitted).

Plaintiffs conclude their Plan by presenting a list of proposed measures for Interior to undertake that (plaintiffs assert) would bring Interior into compliance with the duties plaintiffs have identified. Chief among these measures is the "appoint[ment of a] new and independent trust administration management solely to administer the Individual Indian Trust." Plaintiffs' Compliance Plan at 33. Plaintiffs enumerate a list of recommended personnel to serve in their proposed management scheme, and provide a description of recommended tasks to be undertaken by these new personnel in order to bring Interior into compliance with its fiduciary duties to the IIM beneficiaries.

Plaintiffs' recommendations overlap to some degree with the recommendation contained in the amici briefs submitted by the National Congress of American Indians. Accordingly, before discussing plaintiffs' recommendations, the Court will analyze the recommendations contained in those amici briefs.

IV. THE INTERESTS OF THE AMERICAN INDIAN TRIBES

A. Introduction

The National Congress of American Indians (NCAI), established in 1944, is the oldest and largest national organization of American Indian and Alaska Native tribal governments, and includes among its members most of the major tribes of the United States. Br. for Amicus Curiae National Congress of American Indians ("First Amicus Brief") at 1, 3. In its March 3, 2003 amicus brief, NCAI explains its reasons for proceeding as amicus curiae in the present case:

Id. at 1-2 (emphasis in original). The Court concludes that although NCAI is not a party to the present litigation, the Indian Tribes possess a substantial interest in avoiding unintended harm that could arise from the issuance of structural injunctive relief in the present case. As NCAI points out:

Id. at 5. It is routine for trial courts to take into account the rights of third parties to a proceeding before issuing injunctive relief. Indeed, one of the factors to be weighed in determining whether to issue such relief is whether the injury to the plaintiff if the injunction is not granted outweighs the injury to other interested parties who will be affected by the injunction. See Al-Fayed v. CIA, 254 F.3d 300, 303 (D.C.Cir.2001); George Washington Univ. v. District of Columbia, 148 F.Supp.2d 15, 17 (D.D.C.2001). It has been well-observed that "[f]or a party in our legal system to be bound by a judicial decree without ever having a chance to be heard is obviously an anomaly." Douglas Laycock, Consent Decrees Without Consent: The Rights of Nonconsenting Third Parties, 1987 U. CHI. L.F. 103, 153. Additionally, one of the seminal articles on institutional reform litigation notes:

Robert E. Buckholz, Jr., et al., Special Project: The Remedial Process in Institutional Reform Litigation, 78 COLUM. L. REV. 784 (1978) (footnote omitted). Therefore, the Court will analyze carefully the assertions and recommendations contained in NCAI's amicus brief.

Id. at 6-7 (internal citation omitted). The Court will separately analyze each of these principles, together with NCAI's recommended actions for compliance with each of them.

B. Clear and Enforceable Standards for Trust Management

The first fundamental trust reform principle identified by NCAI is that "Indian trust fund management be governed by clear and enforceable standards, with an express right of compensation for trust mismanagement, and independent review of trust management activity." Id. at 10. NCAI explains the reasoning behind this principle:

Id. at 11 (internal citations omitted). NCAI agrees with plaintiffs that the fiduciary duties of trustees defined at common law govern the administration of the IIM trust:

Id. (citations omitted). Interior, however, disagrees that these common-law standards govern the administration of the IIM trust. Inasmuch as this Court directed Interior to submit a plan to bring itself into compliance with the fiduciary obligations it owes to the beneficiaries of the IIM trust, it will be necessary first to determine the precise nature of those fiduciary obligations. Therefore, before proceeding to examine NCAI's recommendations for actions to be adopted in accordance with its first principle, the Court must address the applicability of commonlaw trust standards to the IIM trust.

1. Testimony of Professor Langbein

In support of its argument that the duties imposed upon trustees at common law do not apply to Interior, in its capacity as trustee-delegate of the IIM trust, Interior presented the testimony of Professor John Langbein of Yale Law School. Professor Langbein testified that the various Restatements of the law of trusts represent the culmination of

Tr., Day 19, PM session (June 2, 2003) at 41:7-15. He further observed that "there are a large number of important points of difference" between the IIM trust and a privately-run trust. Id. at 58:9-10. Professor Langbein enumerated at least nine differences that the IIM trust has from a private trust, including: Congress is the settlor of the IIM trust and therefore, there is no ordinary trust instrument for the IIM trust—rather, the trust terms are contained in statutes; a government agency serves as the trustee; the IIM trust is massively underdiversified, in that the trust corpus is virtually all real estate; congressional appropriations fund the trust's administration, rather than a fee charged to the trust beneficiaries; the IIM trust has had exceptional longevity; no outside regulatory agency regulates the IIM trust; the trustee of the IIM trust may not resign; some assets of the trust may be directly managed by IIM beneficiaries through "direct pay" agreements; and Indian Tribes administer certain aspects of trust operation at the local level. See id. at 58:7—76:25.

Professor Langbein also stated that, in his opinion, the terms of the "trust instrument" of the IIM trust were also to be contained in appropriations legislation:

Id. at 59:13—60:6.

Interior relies almost solely on the testimony of Professor Langbein for its conclusion that the traditional common-law trustee duties do not govern the administration of the IIM trust. However, with a single exception, it is not Professor Langbein's testimony that the Court finds fault with, but with the idiosyncratic conclusions that Interior purports to have deduced from his testimony.

First, the Court agrees with Professor Langbein's conclusion that the law of trusts, the most authoritative statement of which is contained in the Restatement of Trusts, Second and the third Restatement of the Law of Trusts, constitutes default law.11 However, the Restatement, Third makes clear that this default law governs trusts created by statutes, where the statutes are silent:

Restatement, Third § 4 cmt. g (emphasis added) (internal citation omitted). Moreover, as the D.C. Circuit recognized in Cobell VI, a trustee must satisfy a heavy burden to overcome the application of that default law:

Cobell VI, 240 F.3d at 1099 (emphasis added) (internal citations and punctuation omitted).12 In other words, in order to overcome the inference that Congress intended to impose upon Interior, as the trustee-delegate of the United States, the traditional fiduciary duties of a trustee as defined in the law of trusts, Interior must demonstrate that "Congress has unequivocally expressed an intent to the contrary."

But Interior has not directed this Court to any unequivocal expression by Congress that it did not intend to impose upon the United States, as the trustee of the IIM trust, the traditional fiduciary duties defined at common law. Indeed, on October 3, 1994, just as Congress was preparing to vote on the 1994 Act, Congressman Mike Synar (D-Okla.), one of the principal proponents of the Act, informed the full House:

140 CONG. REC. 24,244 (1994) (emphasis added). Congressman Synar thus expressly stated what Congress had tacitly assumed: that what was expected from Interior in its administration of the IIM trust was nothing less than the basic fiduciary responsibilities expected of any trustee. Additionally, during an oversight hearing on the bill that became the 1994 Act, Congressman Bill Richardson (D-N.M.), the primary sponsor of the bill, declared:

Hearing Before the Subcomm. on Native American Affairs of the Comm. on Natural Resources on H.R. 1846 and 4833, 103d Cong. 2 (Aug. 11, 1994) (emphasis added).

The Court agrees that, in some respects, the IIM trust differs from a private trust. From that premise, however, it does not follow that "[b]ecause of these many differences, one cannot simply graft private standards onto the individual Indian trust." Defs.' Proposed Findings of Fact and Conclusions of Law at 223 (footnote omitted) ("Defs.' Prop. Findings and Conclusions"). The suggestion that the Court is attempting to "graft" standards onto the IIM trust implies that traditional common-law trustee duties represent a foreign concept that the Court is attempting to apply in an area where they do not belong. But "[i]t is well established that conduct of the Government as a trustee is measured by the same standards applicable to private trustees." Manchester Band of Pomo Indians v. United States, 363 F.Supp. 1238, 1245 (N.D.Cal.1973) (citation omitted). Moreover, it is not plaintiffs' burden to demonstrate that the traditional common-law trustee duties apply to Interior; rather, as explained above, it is Interior's burden to show that Congress has unequivocally expressed an intent to the contrary. Additionally, the fact that the IIM trust possesses some qualities that distinguish it from a typical private trust does not mean that trust law does not govern its operations. To argue this is akin to arguing that because a particular contract differs in some aspects from a "typical" contract, it is not governed by contract law. Interior has directed the Court to no case law suggesting that a trust that is massively underdiversified, has had exceptional longevity, is not regulated by an outside regulatory agency or shareholders—or that possesses any of the distinctive qualities identified by Professor Langbein—thereby loses its status as a "trust" and is no longer governed by trust law. But this is precisely what Interior is implying when it alleges that because the IIM trust is different in some aspects from a typical commercial trust, it is not governed by traditional common-law standards.

Moreover, Interior's conclusions are seriously undermined by the testimony of Richard Fitzgerald, Acting Director of the newly-formed Office of Trust Regulations, Policies and Procedures at Interior:

Tr., Day 8, AM session (May 12, 2003) at 20:18—21:12.

Finally, the Court must disagree with Professor Langbein's assertion that "if Congress passes a budget appropriation that gives you inadequate funds to carry out something that Congress has earlier said you should carry out, that is the same thing as if Congress says, we hereby amend the trust to order you not to carry out the earlier duty." First, Professor Langbein acknowledged that he was not aware of any case law supporting such a proposition:

Tr., Day 20, AM session (June 3, 2002) at 79:18—23, 80:1-9. Professor Langbein's remarks, however, miss the point. In the absence of controlling precedent that insufficient appropriations legislation can modify the underlying substantive obligations owed by a trustee, the Court must conclude that such legislation does not modify such obligations. In other words, the burden is on Interior to prove that an insufficient appropriations act will excuse or modify the discharge of a trustee's obligations, not on plaintiffs to disprove it. This is in keeping with the D.C. Circuit's holding that "[c]ourts must infer that Congress intended to impose on trustees traditional fiduciary duties unless Congress has unequivocally expressed an intent to the contrary."

Moreover, this Court has previously rejected Interior's arguments that a lack of funding would excuse its failure to comply with its fiduciary duties. In Cobell V, this Court stated:

Cobell V, 91 F.Supp.2d at 48. This conclusion is consistent with the foremost treatise on the law of trusts, which provides that "[t]he trustee, having accepted [its appointment as trustee], is not relieved of liability merely because by the terms of the trust he is to receive no compensation. His duty to administer the trust is not a contractual duty, and it is immaterial that he receives no consideration for his undertaking to administer the trust." 2A AUSTIN W. SCOTT & WILLIAM F. FRATCHER, THE LAW OF TRUSTS § 169, at 311 (4th ed. 1987) ("Scott on Trusts"); cf. Caswell v. Califano, 435 F.Supp. 127, 135 (D.Me.1977) ("Moreover, defendant's claim of inadequate resources does not justify violation of a federal statute.") (citing cases). Therefore, although the defense of unreasonable resources might be available as a defense in a contempt proceeding, it does not relieve a trustee of liability for its failure to administer the trust.

The Supreme Court has also rejected the assertion that appropriations measures may be read as implicitly repealing previous law:

(Emphasis added.)

Tennessee Valley Authority v. Hill, 437 U.S. 153, 190-91, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978) (emphasis in original) (internal citations and punctuation omitted); see also New York Airways v. United States, 177 Ct.Cl. 800, 369 F.2d 743, 748 (1966) ("It has long been established that the mere failure of Congress to appropriate funds, without further words modifying or repealing, expressly or by clear implication, the substantive law, does not in and of itself defeat a Government obligation created by statute.") (citations omitted).

Nor has Interior's Office of the Solicitor endorsed the notion that appropriations legislation modifies Interior's substantive fiduciary obligations to the IIM beneficiaries. Regarding this issue, former Solicitor Krulitz prefaced his discussion by noting that

Krulitz Letter at 14 (emphasis added). He then explained:

Id. (emphasis added). In short, when faced with this very issue, the highest legal official at Interior never advanced any notion that, in and of themselves, the passage of insufficient appropriations measures might modify or repeal Interior's trustee obligations. Instead, Solicitor Krulitz made it clear that faced with such a circumstance, it would be "the responsibility of executive branch officials ... to seek express direction from the Congress" as to how they should proceed.

And Congress, to its credit, has consistently provided funding to Interior to carry out its substantive trust responsibilities. Congress's intent that sufficient future funding should be made available to enable Interior to comply with its trustee duties is plain in its inclusion of section 303 of the 1994 Act. That section requires the Special Trustee to

25 U.S.C. § 4043(c)(5)(A). Additionally, subsection (c)(5)(B) requires "[e]ach program manager participating in trust management or charged with responsibilities under the comprehensive strategic plans [to] transmit his office's budget request to the Special Trustee at the same time as such request is submitted to his superiors (and before submission to the Office of Management and Budget) in the preparation of the budget of the President submitted to the Congress." The Special Trustee is then required to "review each budget request submitted under subparagraph (B); certify in writing as to the adequacy of such request to discharge, effectively and efficiently, the Secretary's trust responsibilities and to implement the comprehensive strategic plan; and notify the program manager of the Special Trustee's certification." 25 U.S.C. § 4043(c)(5)(C).

Congress's inclusion of section 303 in the 1994 Act demonstrates its intent to ensure that Interior received appropriate funding to discharge its fiduciary obligations to the IIM beneficiaries. In the House Report accompanying the 1994 Act, the House Committee on Natural Resources explained that

H.R. REP. No. 103-778, at 19 (1994), reprinted in 1994 U.S.C.C.A.N. 3467, 3478. As demonstrated by the testimony of Special Trustee Swimmer during the Phase 1.5 trial, the mechanism set in place by Congress appears to be generating sufficient funding requests:

Tr., Day 36, PM session (June 25, 2003) at 40:17—41:9 (emphasis added).

Additionally, apart from the testimony of Professor Langbein, Interior cites only two cases in support of its assertion that the traditional common-law fiduciary duties do not govern IIM trust administration. First, Interior cites a recent Supreme Court case in support of its assertion that this Court "must look to the statute or regulation establishing the trust relationship to determine the nature of the specific obligations owed, rather than simply applying all of the common-law trust duties." Defs.' Proposed Findings and Conclusions at 226. But United States v. White Mountain Apache Tribe, 537 U.S. 465, 123 S.Ct. 1126, 155 L.Ed.2d 40 (2003), actually supports rather than undermines the conclusion that the traditional common-law duties of a trustee govern the administration of the IIM trust. The issue to be determined in White Mountain Apache was whether the Court of Federal Claims "[possessed] jurisdiction over the White Mountain Apache Tribe's suit against the United States for breach of fiduciary duty to manage land and improvements held in trust for the Tribe but occupied by the Government." White Mountain Apache, 123 S.Ct. at 1130. In concluding that it did, the Court explained that a statute passed in 1960 providing that the former Fort Apache Military Reservation would be held by the United States in trust for the White Mountain Apache Tribe

Id. at 1133-34 (emphasis added) (footnotes and internal citation omitted).

In other words, the fact that the statute establishing the trust did not "expressly subject the Government to duties of management and conservation" did not lead the Court to conclude that such a duty did not exist. Instead, the Court deduced from "the fact that the property occupied by the United States is expressly subject to a trust" the conclusion that the common-law fiduciary duty of prudence and duty to preserve and maintain trust assets applied to the United States as a trustee. In short, the Court did not stop at the language of the statute in determining the scope of the United States's obligations as trustee, but instead looked to "elementary trust law" to provide the governing trust duties. Indeed, the Federal Circuit opinion affirmed by the Court explicitly stated that "[a]lthough neither the 1960 Act nor any pertinent regulation sets forth clear guidelines as to how the government must manage the trust property, we think it is reasonable to infer that the government's use of any part of the property requires the government to act in accordance with the duties of a common law trustee." White Mountain Apache Tribe v. United States, 249 F.3d 1364, 1377 (Fed.Cir.2001).

Second, Interior cites Cherokee Nation of Oklahoma v. United States, 21 Cl.Ct. 565 (1990), for the proposition that "the relationship between the United States and Indians is not comparable to a private trust relationship." Defs.' Prop. Findings and Conclusions at 226. That is not, however, what the U.S. Court of Claims said in Cherokee Nation. Instead, it merely observed that "[t]he general relationship between the United States and the Indian tribes is not comparable to a private trust relationship." Id. at 573 (emphasis added). But the IIM trust is not merely a "general relationship" with the United States, nor is it a relationship with Indian Tribes, as opposed to individual Indians. Accordingly, the precedential value of Cherokee Nation for the present case is, at best, extremely limited.

In sum, the D.C. Circuit has instructed this Court that it "must infer that Congress intended to impose on trustees traditional fiduciary duties unless Congress has unequivocally expressed an intent to the contrary." Interior is the trustee-delegate for the United States with respect to the IIM trust. Interior has directed this Court to no statute demonstrating that Congress has unequivocally expressed an intent not to impose upon Interior traditional fiduciary duties. Accordingly, this Court holds that Congress intended to impose upon Interior the traditional fiduciary duties of a trustee, and that the scope and nature of those duties are coextensive with the duties imposed upon trustees at common law.

2. The Fiduciary Duties Owed to the IIM Beneficiaries

Having reached the conclusion that the duties imposed at common law upon trustees govern the administration of the IIM trust, it will be necessary for the Court to enumerate these duties, together with their basic Restatement definition. The common-law duties that govern Interior's administration of the IIM trust are as follows:13

a. Duty to Administer the Trust

"Upon acceptance of the trust by the trustee, he is under a duty to the beneficiary to administer the trust." Restatement, Second § 169. As noted above, it follows from this duty that "[t]he trustee, having accepted, is not relieved of liability merely because by the terms of the trust he is to receive no compensation. His duty to administer the trust is not a contractual duty, and it is immaterial that he receives no consideration for his undertaking to administer the trust." 2A Scott on Trusts § 169, at 311.

b. Duty of Loyalty

"The trustee is under a duty to the beneficiary to administer the trust solely in the interest of the beneficiary. The trustee in dealing with the beneficiary on the trustee's own account is under a duty to the beneficiary to deal fairly with him and to communicate to him all material facts in connection with the transaction which the trustee knows or should know." Restatement, Second § 170. As stated by former Interior Solicitor Anderson, this duty requires the government "to administer trust resources solely in the interest of the beneficiary, so that any profits gained through administration of the trust accrue to the beneficiary." Anderson Memorandum at 14 (citing Manchester Band of Pomo Indians, 363 F.Supp. at 1245; Navajo Tribe of Indians v. United States, 176 Ct.Cl. 502, 364 F.2d 320, 324 (1966); and Menominee Tribe of Indians v. United States, 102 Ct.Cl. 555, 59 F.Supp. 137, 141 (1944)).

c. Duty Not to Delegate

"The trustee is under a duty to the beneficiary not to delegate to others the doing of acts which the trustee can reasonably be required personally to perform." Restatement, Second § 171. Congress, the settlor of the IIM trust, partly overrode this duty in the General Allotment Act, 24 Stat. 388, and the Indian Reorganization Act, 48 Stat. 984, by expressly delegating the United States's administration of the IIM trust to the Interior and Treasury Departments. Additionally, with the passage of the Indian Self-Determination and Education Act of 1975, Pub.L. No. 93-638 ("Self-Determination Act"), Congress further overrode this duty by authorizing federal agencies, including Interior, to transfer local control over the administration of federal programs such as the IIM trust to Indian Tribes.

d. Duty to Keep and Render Accounts

"The trustee is under a duty to the beneficiary to keep and render clear and accurate accounts with respect to the administration of the trust." Restatement, Second § 172. The nature and scope of this duty is discussed at length in the companion memorandum opinion issued this date. It will suffice here to note that, as affirmed in that opinion, the scope of Interior's duty to account is far broader than the specific provisions contained in the 1994 Act, which merely "sought to remedy the government's long-standing failure to discharge its trust obligations; it did not define and limit the extent of [Interior's] obligations." Cobell VI, 240 F.3d at 1100; see also id. at 1098 ("[T]he government is incorrect to the extent that it assumes that the 1994 Act forms the basis for its fiduciary obligations. The 1994 Act did not create these obligations any more than it created the IIM trust accounts. As noted above, the 1994 Act was a remedial statute designed to ensure more diligent fulfillment of the government's obligations. It recognized and reaffirmed what should be beyond dispute—that the government has longstanding and substantial trust obligations to Indians, particularly to IIM trust beneficiaries, not the least of which is a duty to account."). Interior's duty to keep and render accounts includes the duty to retain records that are necessary to the performance of an accounting

e. Duty to Furnish Information

"The trustee is under a duty to the beneficiary to give him upon his request at reasonable times complete and accurate information as to the nature and amount of the trust property, and to permit him or a person duly authorized by him to inspect the subject matter of the trust and the accounts and vouchers and other documents relating to the trust." Restatement, Second § 173. As noted by the Southern District of New York, "[t]he common law recognizes an obligation on the part of the trustee to provide full and accurate information to the beneficiary on his management of the trust." Martin v. Valley Nat'l Bank of Arizona, 140 F.R.D. 291, 322 (S.D.N.Y.1991).

f. Duty to Exercise Reasonable Care and Skill

"The trustee is under a duty to the beneficiary in administering the trust to exercise such care and skill as a man of ordinary prudence would exercise in dealing with his own property; and if the trustee has or procures his appointment as trustee by representing that he has greater skill than that of a man of ordinary prudence, he is under a duty to exercise such skill." Restatement, Second § 174.

With respect to this duty, Interior claims that "the applicable standard is that of a reasonable person similarly situated. Thus, the prudence standard applicable to Interior would be that of similarly situated federal agencies facing similar congressional restraints and co-existing statutory obligations." Defs.' Prop. Findings and Conclusions at 118 n. 25. But the only authority cited by Interior in support of this assertion is the trial testimony and expert report of Professor Langbein. In turn, Professor Langbein does not direct this Court to any case law that would support the proposition advanced by Interior. Instead, Professor Langbein points to the official comment to the Uniform Prudent Investor Act, which explains that its standard is "the standard of the prudent investor similarly situated," and a subsection of the Employee Retirement Income Security Act ("ERISA"), which directs a plan fiduciary to behave as "a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims." 29 U.S.C. § 1104(a)(1)(B). However, both the "prudent investor" and "prudent man" standards are workable standards precisely because, under a given set of circumstances, there will be other similarly-situated prudent investors or prudent persons against whose conduct a court may measure a defendant's conduct. By contrast, the standard of a "similarly situated federal agenc[y] facing similar congressional restraints and co-existing statutory obligations" is virtually meaningless. It lacks any precise meaning because, to the Court's knowledge, there are no similarly-situated federal agencies charged with fiduciary responsibilities that face similar congressional restraints and co-existing statutory obligations. Therefore, the "similarly-situated federal agency" standard would simply mean whatever Interior wants it to mean.

However, the available case law does not suggest that the duty to exercise reasonable care and skill is meaningless, even when it is the United States that is charged with such a duty. Thus, the Supreme Court has stated: "There is no doubt that the United States serves in a fiduciary capacity with respect to these Indians and that, as such, it is duty bound to exercise great care in administering its trust.... As Professor Scott has written, `A trustee is under a duty in administering the trust to exercise such care and skill as a man of ordinary prudence would exercise in dealing with his own property.' 2 A. Scott, Trusts 1408 (3d ed.1967)." United States v. Mason, 412 U.S. 391, 398, 93 S.Ct. 2202, 37 L.Ed.2d 22 (1973) (internal citation omitted). In Manchester Band, the district court, having observed that "conduct of the Government as a trustee is measured by the same standards applicable to private trustees," did not utilize a "similarly-situated government agency" standard, but instead stated only that "[w]hile the normal standard of care and skill required of a trustee is that of a man of ordinary prudence in dealing with his own property, if the particular trustee has a greater degree of skill than that of a man of ordinary prudence, he will be held liable for any loss resulting from the failure to use such skill as he has." Manchester Band, 363 F.Supp. at 1244 (citing Restatement, Second § 174 cmt. a); see also Menominee Tribe of Indians v. United States, 101 Ct.Cl. 10 (1944) (concluding that "to whatever extent the Secretary of the Interior could have, in the course of prudent management of the affairs of the Indians, and without impairing funds which he reasonably thought it was necessary to keep supplied for the purpose of meeting authorized expenditures, used the noninterest-bearing funds or those bearing the lower rate of interest, and instead used funds bearing interest, or a higher rate of interest, the Government is under a duty to pay to the plaintiffs the interest thereby lost by them.").

Accordingly, the Court rejects Interior's assertion that its duty to exercise reasonable care and skill with respect to the administration of the IIM trust merely requires it to behave as a "similarly situated federal agenc[y] facing similar congressional restraints and co-existing statutory obligations" would. Instead, the scope and nature of its duty is coextensive with the traditional common-law duty of a trustee to exercise reasonable care and skill in its administration of the trust.

g. Duty to Take and Keep Control

"The trustee is under a duty to the beneficiary to take reasonable steps to take and keep control of the trust property." Restatement, Second § 175. In the Indian Self-Determination Act, Congress allowed for federal agencies, including Interior, to transfer local control over the administration of federal programs to Indian Tribes, including the administration of trust assets in the IIM trust. However, although Interior may transfer local control over the administration of assets in the IIM trust to Indian Tribes, Interior is not thereby wholly relieved of its duty to take and keep control of such assets. Rather, such a transfer is akin to a transfer of possession of portions of the trust property to an attorney, banker, or other agent. See id. § 175 cmt. e ("To the extent to which it is reasonable for the trustee to entrust the possession of the subject matter of the trust to his attorney, broker, banker or other agent, the trustee can properly do so.").

h. Duty to Preserve the Trust Property

"The trustee is under a duty to the beneficiary to use reasonable care and skill to preserve the trust property." Id. § 176. This includes a duty on the part of Interior "to use reasonable care to protect the trust property from loss or damage." Id. § 176 cmt. b.

i. Duty to Enforce Claims and to Defend Actions

"The trustee is under a duty to the beneficiary to take reasonable steps to realize on claims which he holds in trust." Id. § 177. "The trustee is under a duty to the beneficiary to defend actions which may result in a loss to the trust estate, unless under all the circumstances it is reasonable not to make such defense." Id. § 178.

j. Duty To Keep Trust Property Separate

"The trustee is under a duty to the beneficiary to keep the trust property separate from his individual property, and, so far as it is reasonable that he should do so, to keep it separate from other property not subject to the trust, and to see that the property is designated as property of the trust." Id. § 179.

k. Duty with Respect to Bank Deposits

"While a trustee can properly make general deposits of trust money in a bank, it is his duty to the beneficiary in making such a deposit to use reasonable care in selecting the bank, and properly to earmark the deposit as a deposit by him as trustee." Id. § 180. Congress has largely overridden the duty to use reasonable care in selecting a bank in which to make deposits by mandating that deposits of IIM trust funds are to be made to Treasury. However, the Court is not aware of any congressional provision overriding Interior's duty to earmark.

l. Duty to Make the Trust Property Productive

"The trustee is under a duty to the beneficiary to use reasonable care and skill to make the trust property productive." Id. § 181. Additionally, "[a] trustee of land is normally under a duty to lease it or to manage it so that it will produce income." Id. § 181 cmt. a.

m. Duty to Pay Income to Beneficiaries

"Where a trust is created to pay the income to a beneficiary for a designated period, the trustee is under a duty to the beneficiary to pay to him at reasonable intervals the net income of the trust property." Id. § 182.

n. Duty to Deal Impartially With Beneficiaries

"When there are two or more beneficiaries of a trust, the trustee is under a duty to deal impartially with them." Id. § 183.

o. Duty with Respect to Co-Trustees

"If there are several trustees, each trustee is under a duty to the beneficiary to participate in the administration of the trust and to use reasonable care to prevent a co-trustee from committing a breach of trust or to compel a co-trustee to redress a breach of trust." Id. § 184. It is therefore the duty of each of the two trustee-delegates (Interior and Treasury) to use reasonable care to prevent the other from committing a breach of the other's trust duties or to compel the other to redress a breach of trust.

p. Duty with Respect to Person Holding Power of Control

"If under the terms of the trust a person has power to control the action of the trustee in certain respects, the trustee is under a duty to act in accordance with the exercise of such power, unless the attempted exercise of the power violates the terms of the trust or is a violation of a fiduciary duty to which such person is subject in the exercise of the power." Id. § 185.

3. Recommendations

The Court having held that the administration of the IIM trust is governed, inter alia, by the traditional duties imposed at common law upon trustees, it must now look to plaintiffs' and NCAI's recommendations for ensuring Interior's compliance with these duties.

As noted above, plaintiffs recommend that the Court "appoint [a] new and independent trust administration management solely to administer the Individual Indian Trust." Plaintiffs' Compliance Plan at 33. However, if this Court were to direct Interior to hire new executive officials to assist it in the administration of its trust duties, it would be treading on dangerous constitutional waters indeed. Therefore, although plaintiffs' recommendation is well-intentioned, the Court nevertheless must decline.14

NCAI informs the Court that the Indian Tribes seek "a meaningful role in a trust management oversight body that would be independent of the DOI, and would monitor and audit the Government's implementation of [policies] and procedures to ensure the proper discharge of the Secretary's trust responsibilities." First Amicus Brief at 13. As stated in the companion memorandum opinion issued this date, the Court has decided to appoint a monitor to report upon Interior's efforts to implement the structural injunction that this Court has issued. The Court certainly considers it appropriate for the monitor to keep well-informed as to the interests of the Tribes regarding the implementation of the structural injunction in this case. Therefore, the Court will direct the monitor to meet with a representative or representatives of NCAI on a quarterly basis, and to file with this Court a complete report of the discussions that take place at such meetings. The Court will thereby be informed as to any concerns of the Tribes regarding the implementation of the structural injunction. Additionally, in order to keep the Tribes well-informed as to the injunction's ongoing implementation, the Court will direct the monitor to serve upon NCAI a copy of every report that the monitor files, at the same time that it is filed with the Court and served upon the parties.

NCAI further "encourage[s] this Court to continue its efforts to ensure that the DOI implements policies and procedures to properly discharge its trust responsibilities. Such policies and procedures should include judicially enforceable rights in the federal courts for equitable relief to enforce the failure to perform or the negligent performance of trust duties." Id. In clarifying that the duties imposed upon trustees at common law, in addition to the specific duties in the 1994 Act, govern the administration of the IIM trust, the Court has done all within its power to ensure that future breaches of those duties will be able to be redressed by the courts. However, there is an important element that could potentially impede the enforcement of such rights—namely, the existence of federal sovereign immunity. As the Supreme Court reaffirmed only a few months ago, "[j]urisdiction over any suit against the Government requires a clear statement from the United States waiving sovereign immunity, together with a claim falling within the terms of the waiver. The terms of consent to be sued may not be inferred, but must be unequivocally expressed, in order to define a court's jurisdiction." White Mountain Apache, 123 S.Ct. at 1131-32 (citations and internal punctuation omitted). The decision to waive sovereign immunity rests solely with Congress, not with the courts. The Court is aware that Congress is presently considering legislation relating to the administration of the IIM trust.

Finally, having determined that the common-law fiduciary duties govern the administration of the IIM trust, the Court deems it appropriate to allow Interior, in the first instance, to determine how it will bring itself into compliance with these duties. Therefore, it will direct Interior to file a statement identifying the steps it intends to take as part of its To-Be Plan to bring itself into compliance with each of these common-law duties. Additionally, if the measures it plans to undertake as part of its To-Be Plan might be deemed to be inconsistent with any of these duties, Interior should provide a description of such measures, together with a full explanation of why the proposed action should not be considered to be inconsistent with its common-law duties.

C. Protection of Tribal Authority and Sovereignty

The second fundamental trust reform principle identified by NCAI is that "[a] primary trust responsibility of the United States is to protect the governing authority of Indian tribes, including the ability of tribes to regulate land use and resource management within their own reservations as well as the right to manage trust assets and accounts through self-determination contracts and compacts." First Amicus Brief at 13.

As the Supreme Court has observed,

United States v. Wheeler, 435 U.S. 313, 323, 98 S.Ct. 1079, 55 L.Ed.2d 303 (1978) (citations and internal punctuation omitted).

In an earlier case, the Court noted that the tribal sovereignty doctrine

McClanahan v. State Tax Comm'n of Arizona, 411 U.S. 164, 172-73, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973) (internal citations and punctuation omitted); see also United States v. Mitchell, 463 U.S. 206, 225, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) ("Mitchell II") ("Our construction of ... statutes and regulations [relating to a fiduciary relationship between the United States and Indian allottees] is reinforced by the undisputed existence of a general trust relationship between the United States and the Indian people."). The passage of the Self-Determination Act reinforced the importance of the principle of tribal sovereignty. Included in the act is a declaration of congressional policy that expressly "recognizes the obligation of the United States to respond to the strong expression of the Indian people for self-determination by assuring maximum Indian participation in the direction of educational as well as other Federal services to Indian communities so as to render such services more responsive to the needs and desires of those communities." 25 U.S.C. § 450a(a). The declaration further stated:

25 U.S.C. § 450a(b). As NCAI notes, since the inception of the Tribal Self-Governance Program in 1990, no delegation of trust programs to the administration of a Tribe has ever been revoked on account of a Tribe's failure of administration. First Amicus Brief at 14 n. 8.

NCAI has "urge[d] this Court, as it considers the appropriate remedies to ensure the Department's compliance with its trust responsibility, to fully recognize that the trustee's duties must be administered in compliance with tribal law and ordinances, and to recognize and protect the important interests that the [Tribes] have in trust management under the [Self-Determination Act]." Id. at 14-15. Plaintiffs have also noted that "[i]t is axiomatic that a trustee must abide by and administer the trust in compliance with governing law. In Indian Country, governing law includes tribal law." Pls.' Compliance Plan at 18 n. 24 (citations omitted).

In Cobell VI, the D.C. Circuit noted that "[i]t is well understood that the extent of a trustee's duties and powers is determined by the trust instrument and the rules of law which are applicable." Cobell VI, 240 F.3d at 1099 (quoting Restatement, Second § 201, at 442) (punctuation omitted). The Court concludes that the rules of law applicable to the administration of the IIM trust include tribal law and ordinances.

However, although Interior acknowledges that NCAI's second fundamental principle "accord[s] with general terms of existing policies of Interior concerning trust management," Interior's Plan does not expressly state that its administration of the IIM trust must be governed in compliance with applicable tribal law and ordinances. Interior Defs.' Resp. to NCAI's Second Amicus Br. at 2-3. Instead, its Plan states only that the sources it looks to for guidance in administering its trust duties include "applicable federal statutes, Interior regulations, the Departmental Manual, OMB circulars, Department of the Treasury guidelines, generally accepted accounting and auditing standards, its employees' and consultants' experience and expertise, as well as other sources of relevant fiduciary practices." Interior's Comprehensive Plan at 3-28. This list nowhere mentions applicable tribal law and ordinances. This is a serious omission, given that one of the major risks that Interior has identified as potentially interfering with the successful implementation of its Plan is if "[v]arious major stakeholders [were to] disagree on the [Comprehensive Plan's] mission and implied boundaries." Id. at 5-13. Moreover, Interior has assessed the potential impact of this risk as "high," explaining that "[i]f the major stakeholders cannot agree on what [the Comprehensive Plan] is and what it isn't, then service and performance expectations will always be misaligned and dissatisfaction always prevalent." Id.

It is manifest that the Indian Tribes are major stakeholders in the administration of the IIM trust. As noted above, tribal interests in trust land and natural resources are physically intermingled and recorded in the same title and ownership systems as the individual interests, and tribal and individual resources are often managed and leased in large units under the same leasing and contractual agreements. Additionally, in many instances, Indian Tribes are responsible for local administration of various aspects of the IIM trust, pursuant to the authority granted to them under the Self-Determination Act. Therefore, the Court concludes that Interior's omission of an express statement that it will manage the administration of the IIM trust in compliance with applicable tribal law and ordinances is an omission that is so defective that it will necessarily delay rather than accelerate its ability to comply fully with its fiduciary obligations to the IIM beneficiaries. Accordingly, the Court will include in its structural injunction a clarification that Interior must administer the IIM trust in compliance with applicable tribal law and ordinances.

In order to facilitate its compliance with applicable tribal law and ordinances, the Court will direct Interior to submit a list of tribal law and ordinances that it deems applicable to its administration of the IIM trust, together with a full statement of the manner in which it considers these laws and ordinances to affect such administration. Following Interior's submission of this list, the Court will permit plaintiffs to submit a brief in response to Interior's submission, which may include a supplemental list of tribal law and ordinances that plaintiffs deem applicable to Interior's administration of the IIM trust. The Court will also grant NCAI leave to submit an amicus curiae brief in response to Interior's submission, which may include a supplemental list of tribal law and ordinances that NCAI deems applicable to Interior's administration of the IIM trust. After these briefs have been filed, either party may file a motion for clarification of the Court's provision in its structural injunction that Interior must administer the IIM trust in compliance with applicable tribal law and ordinances.

D. No Redirection of Funds for BIA Services

The third fundamental trust principle identified by NCAI is that "reform of the United States' Indian trust fund management not reprogram funds from vitally needed BIA services and must not create new levels of bureaucracy that would impede the delivery of trust services to local needs." First Amicus Brief at 15. NCAI explains that "[m]any individual Indians lack access to basic resources and depend on BIA and tribal administered programs for their very survival. Many others rely on such services as education to provide the opportunities for self-sufficiency and advancement. Diverting resources from these programs to correct the DOI's historical or current failures in trust administration is not trust reform, but another breach of trust." Id. at 16.

NCAI further notes that in the 1994 Act, Congress provided a mechanism intended to remedy the Department's failure to request adequate appropriations for Indian trust programs. The Special Trustee is charged with the duty of certifying the adequacy of the BIA budget to meet its trust reform and other obligations.... This provision of the 1994 Act should be properly implemented as a mechanism to communicate to Congress whether the DOI has requested sufficient funding to carry out the obligations due Indians under its trust responsibility. The DOI's duty is to request adequate funding for trust programs. It is for Congress, not the DOI, to decide whether adequate funding will be provided.

Id. at 16-17 (footnote and citation omitted). The Court agrees that this provision should be properly implemented, and that any claims that the Office of the Special Trustee has not complied with this statutory requirement should be brought before this Court. However, NCAI further requests that this Court require such certifications to "include detailed identification of any additional funding for trust reform that must come from new appropriations, and a signed statement that funding and personnel for BIA program services have not been diminished by, or reallocated to, the DOI's trust reform activities." Id. at 41.

But the Court can find no provision in the 1994 Act that would permit it to order such requirements. The Court is sympathetic to the concerns of the Tribes regarding the adequacy of funding for Indian education, social services, and law-enforcement programs administered by the BIA, and it agrees that Congress should adequately fund those programs. But to paraphrase NCAI's amicus brief, "it is for Congress, not the DOI, to decide whether adequate funding will be provided" for such programs. Of course, if any of the Tribes possess a justiciable claim that Congress has inadequately funded Indian education, social services, and law-enforcement programs in violation of applicable federal statutes, they may file such a claim in the proper court. But such a claim has not been raised in the present case, and thus, it is not a legal question that is presently within the purview of this Court.

The Court stresses that it is in no way either stating or implying that Interior should transfer or reprogram funds allocated by Congress to fund education, social services, and law-enforcement programs for Indians, and use them to fund its historical accounting of the IIM trust fund. Nor does the Court have any reason to believe that it will be necessary for Congress to do so. To this Court's knowledge, Congress has made no representation that it will be necessary to reallocate funds intended for these BIA-administered programs in order to adequately fund Interior's administration of the IIM trust, or that it intends to make such a reallocation.15

E. Increased Tribal Control over Land and Resources

The fourth fundamental trust principle identified by NCAI is that "trust reform must provide for increased tribal control over land and resources along with a federal system that provides oversight and technical assistance in flexible arrangements driven by the unique circumstances of each reservation." Id. at 17. NCAI explains that the effective administration of the Indian trust will not be accomplished with a uniform, one size fits all solution. Prospective reform requires reservation-specific approaches.... Also, trust assets can be managed prudently and effectively where the trustee gives appropriate deference to tribal law in its administration of the trust and where the federal government responds to tribal needs, including technical assistance to improve the tribes' resource management capacity. This level of flexibility and sensitivity to local tribal concerns has important implications for the regional and local level structure of the DOI bureaucracy administering trust resources, services and accounts.

Id. As explained above, the Court agrees that Interior must give appropriate deference to tribal law in its administration of the IIM trust, and it has directed Interior to submit a list of tribal laws and ordinances that it deems applicable to its management of the trust. NCAI also suggests that "any trust reform restructuring assure that at the regional/local level, each tribe interacts with a single governmental decision-maker ... who has authority over the entire range of Indian programs (uniting trust resources, services and accounts)." Id. at 17-18. Although the Court agrees with this suggestion, NCAI has not directed this Court to any provision in the 1994 Act or other applicable law (including common-law trust duties) that would mandate such interaction. Accordingly, the Court must conclude that, unfortunately, this issue is beyond the purview of the Court in the present case.

F. Involvement of Tribal Governments

The fifth fundamental trust principle identified by NCAI is that "tribal governments must be intimately involved in developing new systems and policies for trust management, with consultation taking place in a manner that ensures that tribal issues are actively addressed." Id. at 18. NCAI explains that

Id. at 19 (citations omitted). NCAI identifies a number of congressional acts, including the Self-Determination Act, that make clear Congress's intent in these respects. It also points to an executive order issued by President Clinton entitled "Consultation and Coordination with Indian Tribal Governments" that expresses the executive branch's agreement with Congress upon such issues. See Exec. Order No. 13,175, 65 Fed.Reg. 67249 (Nov. 6, 2000).

In support of this fifth principle, NCAI recommends in its first and second amicus briefs that this Court "direct the DOI to halt its ongoing reorganization of the BIA and expansion of OST, pending the Court's rulings in this litigation." Br. for Amicus Curiae National Congress of American Indians, Aug. 4, 2003 ("Second Amicus Brief") at 22. NCAI points out that Interior's proposed reorganization efforts have been criticized by tribal leaders and that Interior failed to consult with the Indian Tribes prior to making its decision to reorganize.

Unfortunately, the Court must decline NCAI's recommendation, not because it deems it to be without merit, but because it is a matter beyond the purview of the Court in the present litigation. First, as tacitly acknowledged by NCAI in its June 18, 2003 resolution, this is a matter for congressional decision, not for the courts. See Second Amicus Br. at attach. B (resolving to "call[] upon Congress to immediately halt the reorganization of the Bureau of Indian Affairs until the concerns of Tribal Leaders are fully addressed by a workable and effective reorganization plan, and until the `To Be' process, developed through true and meaningful consultation with Indian Tribes, is completed" and requesting "a series of hearings before the Senate Committee on Indian Affairs and the House Resources Committee on the BIA reorganization"). Second, if NCAI possessed a judicially-cognizable claim that Interior's planned reorganization violated established law—an issue as to which the Court makes no finding one way or the other—it would need to file a complaint seeking injunctive relief against Interior in order to halt the reorganization process. Because NCAI is not a party to the present litigation, the Court is precluded by the standing doctrine from entertaining such a request in the present case.

The Court recognizes that NCAI will doubtlessly be disappointed by this Court's decision to decline its recommendation, and it regrets that it must do so. But as explained above, this Court has no other choice in the matter because the issue is beyond its purview in the present case.

G. Core Systems

Finally, NCAI asserts that "[a]t its heart, Indian trust fund administration requires accountability in three core systems that comprise the trust business cycle: 1) Title; 2) Leases/Sales; and 3) Accounting. These core systems must be accurate and integrated, timely, and be subject to credible standards and oversight." First Amicus Brief at 25 (footnote omitted). NCAI critiques Interior's Compliance Plan for failing to include any specific plans to fix the existing problems with these three core systems. The Court will analyze NCAI's critique and recommendations.

First, NCAI describes the title and ownership system of the IIM trust as "the most fundamental aspect of the trust system. DOI cannot accurately collect and distribute trust funds if it does not have correct information about the beneficial owners of the trust assets. This is the starting point for any effort to fix the trust system." Id. at 25-26 (footnote omitted). It explains the problems with the current title and ownership system:

Id. at 26 (footnote omitted). Because "[c]leaning up the ownership information and implementing an effective title system that is integrated with the leasing and accounting systems is a primary need for the Indian trust system," NCAI encourages this Court "to ensure that expeditious reforms are made to the title system, including particularly the probate process." Id. at 26, 27.

Second, NCAI notes the importance of the leasing system of the IIM trust: "Most Indian trust transactions take the form of a lease of the surface or subsurface of an allotment, permits to allow the lessee to conduct certain activities in return for a fee, or a contract for the sale of natural resources such as timber." Id. at 27. It then identifies current problems with the leasing system:

Id. Given the problems with BIA's leasing system, NCAI encourages this Court to "ensure that [Interior's] management information and administrative systems provide accurate and timely information regarding the trust resource transactions that produce income that is deposited into trust accounts." Id.

Third, NCAI critiques the IIM accounting system:

Id. at 28.

Fourth, NCAI points out that Interior's Plan "further omits discussion of at least one essential element that must be implemented to effectively preserve the trust corpus—properly distinguishing trust principal and trust income." Id. at 29. It asserts that without a plan to distinguish principal from income during the accounting process, "the trust corpus will continue to erode to the detriment of tribes and individual Indians." Id. at 29-30.

NCAI thus recommends that Court "focus its oversight efforts on the core trust systems essential to trust fund accounting and trust asset management... title, leasing and accounting systems. These core systems must be functional, accurate, integrated, timely and subject to credible oversight." Id. at 39. Specifically, NCAI recommends that this Court direct Interior to "complete detailed plans, policies and procedures for correcting those systems that can be implemented within six months of the date of the Court's order." Id. at 40.

The Court is concerned that Interior's Comprehensive Plan lacks any specific proposals to ensure that its title, leasing, and accounting systems are integrated and functional, and can be depended on in the future to generate accurate information. Without these systems operating correctly, it does not seem possible that Interior will be able to comply with the 1994 Act's requirement that

25 U.S.C. § 4011(b). Nor does it appear that Interior will be able to comply with its pre-existing duty to account to the IIM beneficiaries without these systems operating correctly. It may be that Interior is planning efforts to address the problems with these systems, but the Court is unable to determine this from the vague language of Interior's Comprehensive Plan. Accordingly, the Court will include in its structural injunction a provision directing Interior to submit a detailed plan of measures it intends to take to correct the problems with the leasing, title, and accounting systems of the IIM trust fund that have been identified by NCAI in its amicus brief. This plan must include a detailed timetable for the implementation of specific measures that will correct these problems.

The Court also agrees that Interior's Comprehensive Plan contains no mention of any intent to distinguish income from principal during its historical accounting of the IIM trust fund. Although the Plan does include "[s]ections applicable to Indian Trust of the Uniformed [sic] Principal and Income Act" among a list of "requirements that may contain provisions affecting the trust management business lines," this reference is so vague as to be virtually meaningless. As affirmed above, Interior must administer the IIM trust in accordance with the traditional common-law duty to use reasonable care and skill to preserve the trust property. The Court will therefore include in its structural injunction a provision directing Interior to identify the steps it intends to take as part of its To-Be Plan to distinguish principal from income during its historical accounting of the IIM trust fund, in accordance with its duty to use reasonable care and skill to preserve the trust property.

V. CONCLUSION

On September 17, 2002, the Court directed Interior to submit a plan for bringing itself into compliance with the fiduciary obligations it owes to the IIM trust beneficiaries. The Court must determine whether Interior's Comprehensive Plan, as modified by provisions in the structural injunction issued this date, represents a reasonable plan to bring Interior into compliance with its fiduciary obligations in a timely fashion.

During the Phase 1.5 trial, this Court qualified Richard Fitzgerald, Acting Director of Interior's Office of Trust Regulations, Policies and Procedures, as an expert on trust operations, trust asset management, trust standards, and trust systems. See Tr., Day 6, PM session (May 8, 2003) at 23:2-11; 34:5. Fitzgerald testified that, in his opinion, Interior's Comprehensive Plan was a reasonable plan for bringing Interior into compliance with its fiduciary duties, if it could be implemented:

Id. at 41:1-25 (emphasis added). NCAI has also offered a qualified positive assessment of the As-Is / To-Be process contained in Interior's Comprehensive Plan:

First Amicus Brief at 36 (emphasis in original).

As explained in the companion memorandum opinion issued this date, controlling precedents such as Brown v. Board of Education, 349 U.S. 294, 75 S.Ct. 753, 99 L.Ed. 1083 (1955) ("Brown II") and Lewis v. Casey, 518 U.S. 343, 116 S.Ct. 2174, 135 L.Ed.2d 606 (1996), require this Court to allow an institutional defendant the first opportunity to propose a remedial plan designed to cure its violations of law. The Court concludes that Interior's Comprehensive Plan, as amended by the relevant provisions of the structural injunction issued this date, represents a reasonable next step in the process of bringing Interior into compliance with its fiduciary obligations to the IIM beneficiaries.

But a plan is merely ink on paper. Fitzgerald thus qualified his remarks by explaining that Interior's Comprehensive Plan represents a "reasonable plan if it can be implemented," and NCAI similarly stressed that the As-Is / To-Be process possesses the "potential for squaring the DOI's trust reform implementation with the requirements set out by Congress and under review by this Court." In short, Fitzgerald's testimony on a slightly different topic is relevant to the present issue:

Id. at 48:17—49:22 (emphasis added). It has frequently been observed that the Enron Corporation possessed an extensive, 65-page code of ethics. Obviously, the mere existence of this code did not prevent the corporation's officers and directors from behaving unethically. Interior's Comprehensive Plan will be similarly useless unless it is actually implemented. Again, the Court turns to Fitzgerald's testimony:

Tr., Day 8, AM session (May 12, 2003) at 17:14—18:16.

As the Court has explained in its companion memorandum opinion, it is very skeptical of the notion that Interior's extraordinary resistance to the clear mandates of Congress and the courts may be explained away simply as the slowness of government bureaucracy. The bunker mentality existing at Interior is not a typical characteristic of federal agencies. The Court will therefore not simply remand to Interior, as it did following the Phase I trial in 1999, but will instead include among the provisions of its structural injunction a requirement that Interior actually implement its Comprehensive Plan, as modified by the present opinion.

The reason that the Court has decided not to simply remand to Interior is that virtually nothing has been accomplished since 1999 to bring Interior into compliance with the fiduciary obligations it owes to the IIM beneficiaries. During the Phase I trial, Interior represented to the Court that its implementation of the Trust Asset and Accounting Management System ("TAAMS") would serve as the center-piece of trust reform. Numerous witnesses testified that when implemented, TAAMS would allow BIA to "administer trust assets, generate timely bills, identify delinquent payments, track income from trust assets, and distribute proceeds to the appropriate account holders." Cobell v. Norton, 226 F.Supp.2d 1, 49 (D.D.C.2002) (citation omitted) ("Cobell VII"). Indeed, one of Interior's proposed findings of fact during the Phase I trial stated that "TAAMS is, at heart, a data management system that contains all the essential functions to enable BIA to meet the requirements of the 1994 Reform Act." Id. at 48 (citation omitted). Additionally, during the Phase I trial,

Id. (citation omitted).

However, on February 23, 2001, the very same day that the D.C. Circuit issued its Opinion affirming the Court's Phase I opinion, then-Chief Information Officer for BIA Dominic Nessi issued a memorandum to the Special Trustee. Nessi, one of Interior's principal witnesses during the 1999 trial, informed the Special Trustee "that trust reform is slowly, but surely imploding at this point in time." Id. at 19. It has subsequently become clear to the Court that TAAMS will never function properly. During the Phase 1.5 trial, former Special Trustee Paul Homan presented uncontradicted testimony that after spending several years and several million dollars developing TAAMS, Interior abandoned the TAAMS project. See Tr., Day 1, PM session (May 1, 2003) at 97:6-8 (testimony of Paul Homan).

It remains the case, however, that for Interior to comply with its fiduciary obligations to the IIM beneficiaries, it is crucial that it be able to access trust data in electronic form, including ownership information. Yet Interior has presented no plan to this Court describing any definite measures to satisfy that need. Indeed, its "Comprehensive Plan" is a plan in name only—the actual plan for bringing Interior into compliance with its fiduciary obligations is the To-Be Plan, which is not expected to be completed until March of 2004. Therefore, the Court views Interior's "Comprehensive Plan" merely as a next step in the process of Interior's bringing itself into compliance with its fiduciary obligations, because it is really only a plan to make a plan (namely, the To-Be Plan).

Thus, from the time that this Court remanded to Interior in 1999 until the anticipated completion of the To-Be Plan in 2004, five years will have elapsed in which Interior has demonstrated virtually no progress in complying with its fiduciary obligations to the IIM beneficiaries. Interior has not shown that any of the breaches of trust identified in the Court's 1999 opinion have been corrected.16 Nor, until 2004, will many of these breaches even be addressed. In that year, when Interior expects to issue its To-Be Plan, it will have been almost ten years since Congress passed the 1994 Act requiring Interior to comply with its duties to the IIM beneficiaries, including its duty to account. Yet not a single statement of account has been issued to a beneficiary since the passage of the Act.

At the close of the Phase I trial, this Court stated that, "given the long and sorry history of the United States' trusteeship of the IIM trust, the defendants' recalcitrance toward remedying their mis-management despite decades of congressional directives, and the consequences of allowing these enumerated breaches of trust to continue, the court will retain continuing jurisdiction over this matter. It would be an abdication of duty for this court to do anything less." Cobell v. Babbitt, 91 F.Supp.2d 1, 7 (D.D.C.1999) ("Cobell V"). At the present juncture, almost four years later, Interior has still failed to mend the breaches of trust enumerated in 1999. Additionally, Interior has informed the Court that it will not be able to submit to this Court its actual plan to bring itself into compliance with its fiduciary obligations until March of 2004, almost a full decade after the passage of the 1994 Act, and five years since this Court remanded to Interior after the Phase I trial. Given these circumstances, the Court concludes that it would be an abdication of this Court's duty to remand back to Interior once again. Given the history of Interior's intransigence in the face of clear mandates from Congress and the courts to take steps to comply with its fiduciary obligations, the only reasonable conclusion is that remanding to Interior at the present juncture would virtually guarantee that this Court's orders will not be carried out. Accordingly, the Court will not remand to Interior. Instead, it will direct Interior to comply with the provisions of its Comprehensive Plan, including the completion of its To-Be Plan.

To ensure Interior's compliance, it will be necessary for this Court to prescribe a timetable for the implementation of Interior's Plan. Although the Court has concluded that this Plan, as amended by the relevant provisions of the structural injunction issued this date, represents a reasonable next step in the process of bringing Interior into compliance with its fiduciary obligations to the IIM beneficiaries, that conclusion is founded upon the premise that the plan will be implemented within a reasonable amount of time. Without knowing whether Interior expects to implement the Plan in the course of two, three, five, ten, fifty, or a hundred years, it is impossible for the Court to verify that premise.

In its January 6 Compliance Plan, Interior listed several specific tasks it intends to accomplish to bring itself into compliance with its fiduciary obligations to the IIM beneficiaries, together with time frames for the completion of those tasks. See Department of the Interior Fiduciary Obligations Compliance Plan at 50-51, 54, 58, 62, 76, 77, 83, 84, 94 (Defs.' Ex. 1). In its proposed findings and conclusions, Interior represents that these time frames "were developed after taking into account Interior's experience, advice from outside experts, statutory constraints, existing budget and appropriation requirements, the need for consultation with Congress and tribes, and Interior's considered judgment of the time required to implement large-scale institutional changes." Defs.' Prop. Findings and Conclusions at 217. The Court will incorporate these time frames into a timetable to be included in the structural injunction issued this date. Additionally, the Court will incorporate into this timetable dates for the completion and implementation of the To-Be Plan, based on Special Trustee Swimmer's testimony during the Phase 1.5 trial that Interior plans to complete the To-Be Model in March or April of 2004, and Interior's representation in its Comprehensive Plan that its implementation of the To-Be Plan will take approximately fourteen months after the To-Be Model is completed.

The Court does not believe that it will take a great deal of time before the monitor's reports on Interior's efforts will demonstrate whether Interior is implementing the provisions of its Comprehensive Plan in good faith. This belief is based in part on the testimony of Fitzgerald during the Phase 1.5 trial:

Tr., Day 8, AM session (May 12, 2003) at 19:16—20:15. The Court has decided not to appoint a receiver to manage the IIM trust at the present time. This decision is based on the Court's conclusion that controlling precedent in this case requires that at this stage of the present proceedings, the appropriate remedy is a structural injunction to bring the institutional defendant into compliance with its legal obligations, together with the appointment of a monitor to report on the defendant's progress in complying with the provisions of the injunction. Within a year or so after the injunction takes effect, it will doubtlessly become clear from the monitor's reports whether Interior is actually complying with the provisions of the injunction that are intended to bring it into compliance with its fiduciary obligations to the IIM beneficiaries.

One final word is in order. The Court is mindful that in some aspects, the interests of the plaintiffs in this action—individual Indian trust beneficiaries—and the interests of the tribal trust beneficiaries may diverge. But the Court is also mindful that, without the input and support of the Indian Tribes, any proposed reform of the IIM trust will likely be doomed to fail. Therefore, even though the Tribes are not parties to the present case, the Court will make every effort to shape its remedies in a way that will not harm the interests of the Tribes. The Court invites amicus NCAI to submit additional amicus briefs in order to bring any important issues that may arise in the future to the Court's attention. Additionally, once the Court has appointed its monitor, the Court will direct him or her to serve each of his or her reports upon NCAI in order to keep the Tribes informed as to the progress of Interior's implementation of the structural relief ordered this date. It will further direct the monitor to meet on a quarterly basis with representatives of NCAI in order to receive input from the Tribes in a timely manner, and to file a detailed report of all such meetings on the record in this case, in order that the Court may receive such input. It is the Court's sincere hope that these measures will minimize any tension that exists between the interests of the plaintiffs and the interests of the Tribes.

An order shall be issued this date consistent with the foregoing memorandum opinion.

ORDER ISSUING STRUCTURAL INJUNCTION

For the reasons set forth in the accompanying memorandum opinions issued this date, the Court hereby issues the following structural injunction:

I. Definitions

For purposes of this structural injunction:

II. General Provisions

III. Historical Accounting

III. Compliance with Fiduciary Obligations

IV. Timetable

A. Historical Accounting1

B. Compliance with Fiduciary Obligations

C. Amendment of the Timetable

V. Judicial Monitor

VI. Retention of Jurisdiction

This Court shall retain jurisdiction over the present matter until December 21, 2009. This retention of jurisdiction shall be subject to any motion for an enlargement of time that may be made.

SO ORDERED.