United States v. Navajo Nation (Navajo I)

What happened

In 1964 the Navajo Nation allowed the predecessor of Peabody Coal Company to mine coal on tribal lands under Lease 8580, made under the Indian Mineral Leasing Act of 1938. The lease set a maximum royalty of 37.5 cents per ton of coal, subject to reasonable adjustment by the Secretary of the Interior on its 20-year anniversary and every ten years after. By the 20-year mark that rate yielded the Tribe about 2 percent of gross proceeds, substantially below the minimum Congress set in 1977 for coal mined on federal lands.

In June 1984 a Bureau of Indian Affairs Area Director, at the Tribe's request, raised the rate to 20 percent. While Peabody's appeal was pending, Peabody wrote to Secretary Hodel and its representatives met with him privately. Hodel then sent a memorandum urging the parties to keep negotiating. In November 1985 they agreed to a royalty of 12.5 percent, which Hodel approved in December 1987.

In 1993 the Tribe sued the United States for damages for breach of trust. The Court of Federal Claims found that the Secretary had flagrantly dishonored the government's general fiduciary duties, but gave judgment to the United States because the Tribe had not tied that to any statutory duty. The Federal Circuit reversed.

On March 4, 2003, the Supreme Court reversed again, 6-3. Justice Ginsburg wrote that a tribe must identify a source of law that "can fairly be interpreted as mandating compensation by the Federal Government." The Tribe's claim "does not derive from any liability-imposing provision" of the Act or its regulations. Justice Souter dissented, joined by Justices Stevens and O'Connor.

Good to know. The Supreme Court did not rule on whether the lower court's finding about the Secretary was correct.

Summarized with AI assistance from 3 sources and checked against their words; not yet reviewed by historians or by the nations. Report an error