Appeals court rules government breached trust duties in Navajo coal case

ALBUQUERQUE, N.M. — A federal appeals court on Thursday handed the nation's largest Indian reservation a victory in a yearslong legal battle over claims that the government and a coal company conspired to cheat the Navajo Nation out of millions of dollars in royalties.

The U.S. Court of Appeals for the Federal Circuit ruled that the federal government failed to uphold its trust duties to the Navajos and that the tribe is entitled to damages from the government.

"After 14 years of litigation, it's extremely gratifying that a distinguished court of appeals has embraced the position that the Navajo Nation has taken and has ensured that trust responsibility is not simply a catch phrase, but it has some real meaning," said Paul Frye, an Albuquerque attorney who represented the tribe in the case.

It was unclear late Thursday whether the government would appeal the ruling. A spokesman with the U.S. Department of Justice said he could not immediately comment on the ruling.

The appeals court has remanded the case back to the Court of Federal Claims to determine how much damage the tribe suffered as a result of the government's actions.

Navajo president Joe Shirley Jr. said late Thursday that he was ecstatic about the ruling.

"I feel like they've been doing an injustice to us all along but now we're beginning to call their hand," he said.

The Navajos claim the government's breach of trust cost them as much as $600 million in lost coal royalties.

For the Navajo Nation, where many people live without running water or electricity, that's more than the total annual tribal budget.

Frye said he hopes the tribe would be able to use whatever damages the court may eventually award to "remedy some serious infrastructure deficiencies."

Shirley also pointed to the needs of the tribe's youngsters and its senior citizens, saying a monetary award would enable the tribe to begin helping itself.

The sprawling reservation covers part of New Mexico, Arizona and Utah. The Peabody Coal Company has mined coal on tribal lands for decades, paying the tribe taxes and mineral royalties.

In 1985, the tribe alleged that Peabody Coal conspired with then-Interior Secretary Donald Hodel to persuade the tribe to accept a lower royalty than other government officials believed the tribe should be paid.

The Navajos said the Interior Department failed in its duty under the Indian Mineral Lease Act to protect the tribe's interest.