IN THE UNITED STATES COURT OF FEDERAL CLAIMS JOINT PRELIMINARY STATUS REPORT

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1 IN THE UNITED STATES COURT OF FEDERAL CLAIMS ) THE WESTERN SHOSHONE ) IDENTIFIABLE GROUP, et al., ) ) Plaintiffs, ) ) v. ) Case No. 06-cv-00896L ) Judge Edward J. Damich THE UNITED STATES OF AMERICA, ) ) Defendant. ) ) JOINT PRELIMINARY STATUS REPORT Pursuant to Appendix A of the Rules of the Court of Federal Claims ( RCFC ), the Western Shoshone Identifiable Group, as represented by Plaintiffs Yomba Shoshone Tribe; Timbisha Shoshone Tribe; Duckwater Shoshone Tribe; and Western Shoshone Indian individuals, Maurice Frank-Church, Jerry Millet, and Virginia Sanchez (collectively Plaintiffs ), and Defendant United States of America, by and through the undersigned counsel, hereby submit the following Joint Preliminary Status Report ( JPSR ) to the Court. This JPSR sets forth the areas of agreement between Plaintiffs and Defendant. Where the parties were unable to come to an agreement, however, the parties state their separate positions, and they do not adopt or consent to the statements of the other party by virtue of submission of this JPSR to the Court. I. PLAINTIFFS INTRODUCTORY STATEMENT Plaintiff Yomba Shoshone Tribe filed its Complaint on December 26, Docket No. ( Dkt. No. ) 1. Plaintiff filed a First Amended Complaint on March 12, 2008 (Dkt. No. 24) which, inter

2 alia, added as plaintiffs Western Shoshone individuals Maurice Frank-Church, Jerry Millet, and Virginia Sanchez, and stated claims on behalf of the Western Shoshone Identifiable Group. On May 22, 2008, Plaintiffs filed a Motion for Leave to File Second Amended Complaint. Dkt. 30. On June 24, 2008, the Court granted Plaintiffs Motion for Leave to file a Second Amended Complaint. On June 27, 2008, Plaintiffs filed their Second Amended Complaint (Dkt. 34) on behalf of the Western Shoshone Identifiable Group and added as additional representative Plaintiffs the Timbisha and Duckwater Shoshone Tribes. Plaintiffs filed their case against the United States under the Tucker Act, 18 U.S.C. 1491, and the Indian Tucker Act, 28 U.S.C Plaintiffs allege claims for breach of fiduciary duty by Defendant relating to Defendant s failure to properly manage certain judgment funds resulting from earlier proceedings before the Indian Claims Commission ( ICC ) and this Court, including, but not limited to, the failure to properly invest, reconcile and account for Plaintiffs trust funds in a manner that would maximize the growth of the trust funds. Plaintiffs seek an award of monetary damages, including compound interest, for the mismanagement of those funds. The specific funds at issue in this case are: United States Department of the Interior ( Interior ) Account JA , which contains the proceeds of the ICC award in ICC Docket No. 326-K, initial award of $26,145,189.89, deposited on December 19, 1979; Account JA which contains the proceeds of ICC Docket No. 326-A-1, initial award of $823, deposited on March 23,1992 and ICC Docket No. 326-A-3, initial award of $29, deposited on September 15, Plaintiffs affirmatively assert that Defendant has waived the right to bring a motion for a more definite statement of claim by failing to do so before the submission of its answer to the Court. See RCFC 12. Thus, Defendant s expectation of a statement from Plaintiffs of detailed 2

3 specific claims and the factual and legal bases for those claims, including the damages claims is understood by the Plaintiff to be in the context of discovery and the presentation of claims by Plaintiffs in dispositive motions and / or at trial. II. DEFENDANT S INTRODUCTORY STATEMENT Plaintiffs filed this case against the United States under the Tucker Act, 18 U.S.C. 1491, and the Indian Tucker Act, 28 U.S.C Plaintiffs allege broad claims for breach of fiduciary duty by Defendant in its management of Plaintiffs trust funds and seek monetary damages. In 2004, Congress passed legislation to permit distribution of these judgment funds. Western Shoshone Claims Distribution Act, Pub. L. No , 118 Stat. 805 ( Distribution Act or Act ). Section 3 of the Distribution Act authorizes the Secretary to make a per capita distribution of one hundred percent of the Western Shoshone judgment funds to each person listed on the judgment roll (which is now being compiled). 25 C.F.R 87.1(l) defines per capita payment as that aspect of a plan which pertains to the individualization of the judgment funds in the form of shares to tribal members or to individual descendants. Given that the lawsuit named tribal Plaintiffs (see Complaint and Second Amended Complaint), instead of individual plaintiffs, notwithstanding the Act s directive of per capita, not tribal, distributions, Defendant filed a motion to dismiss the tribal Plaintiffs under RCFC Rules 12(b)(6) and 12(b)(7). See Defendant s Motion to Dismiss Tribal Claims and supporting Memorandum filed on March 28, Dkt. No. 27. On October 31, 2008 the Court issued an Opinion denying the motion. By acknowledging this Court s ruling concerning the tribal Plaintiffs, Defendant does not waive any right of appeal or any of the arguments set forth in its motion to dismiss the tribal 3

4 Plaintiffs in this case. As set forth in its Answer filed on December 23, 2008 (Dkt. No. 41) and as discussed in greater detail below, Defendant asserts various defenses that may bar Plaintiffs claims in this litigation. Defendant s assertion of its defenses, however, must await Plaintiffs detailed specific claims and the factual and legal bases for those claims, including the damages claims. Once Plaintiffs have defined and delineated their claims clearly, through their submissions to Defendant and, if appropriate, the Court, including but not limited the work of Plaintiffs expert witnesses, Defendant may raise other appropriate defenses. Defendant believes that such defenses may be susceptible to resolution by dispositive motions. III. PARTIES REPORT PURSUANT TO RCFC APPENDIX A Pursuant to the requirements of RCFC Appendix A, counsel for the parties conducted the early meeting of counsel on January 29, 2009, February 13, 2009, and February 27, 2009, by telephone conference calls. The following attorneys participated in the first conference call: 1. Counsel of Record for Plaintiffs: Thomas E. Luebben; 2. Other Counsel for Plaintiffs: Samuel D. Hough; 3. Counsel of Record for Defendant: Daniel G. Steele, United States Department of Justice; 4. Other Counsel for Defendant: Michael A. Bianco, Office of the Solicitor, United States Department of Interior. The following attorneys participated in the second and third conference calls: 1. Counsel of Record for Plaintiffs: Thomas E. Luebben 4

5 2. Other Counsel for Plaintiffs: Samuel D. Hough; 3. Counsel of Record for Defendant: Daniel G. Steele, United States Department of Justice; 4. Other Counsel for Defendant: Michael A. Bianco, Office of the Solicitor, United States Department of Interior; Rebecca Saltiel, Office of the Chief Counsel, Financial Management Service, United States Department of the Treasury. Counsel for the parties discussed their positions on the required elements of this JPSR, as set forth in RCFC Appendix A and RCFC 26. A. Does the Court have jurisdiction over the action? This Court has jurisdiction over this case under 28 U.S.C (the Tucker Act) and 28 U.S.C (the Indian Tucker Act). Defendant s Position: Depending on Plaintiffs detailed specification of their claims, Plaintiffs claims may be barred by application of the statute of limitations at 28 U.S.C Further, the Court may lack jurisdiction under the Tucker Act and Indian Tucker Act, 28 U.S.C. 1491(a)(1), 1505, over those claims for which Plaintiffs are unable to identify an appropriate legal or factual basis that would sustain such claims (e.g., a specific fiduciary money-mandating duty). Defendant can determine which, if any, of Plaintiffs claims are viable only upon the completion of expert discovery, including the completion of Plaintiffs expert witness work and Plaintiff s submission of their final expert reports. B. Should the case be consolidated with any other case and, if so, why? 5

6 The parties do not believe this case should be consolidated with any other case. C. Should the trial of liability and damages be bifurcated, and if so, why? Plaintiffs do not believe that it would be necessary to bifurcate the trial into liability and damages phases. To the extent that the statutory and common law fiduciary duties of the Defendant and the liability of the Defendant for the breach of those duties do not entail complex factual and legal issues, and may be susceptible to an order on summary judgment, and to the extent that the trust funds at issue in this case lack the complexities of multitudinous transactions involved in other trust fund mismanagement cases, the Plaintiffs believe that the factual and legal issues can be presented concisely and with clarity in a single trial. Defendant s Position: Defendant believes that it would be appropriate to bifurcate the trial into liability and damages phases. Such a bifurcation would afford Defendant the opportunity in the liability phase to evaluate, inter alia, whether Plaintiffs claims, including their alleged measure of damages, are viable as a matter of law in advance of a trial on damages. D. Should further proceedings in the case be deferred pending consideration of another case before this court or any other tribunal and, if so, why? The parties are unaware of another case before this Court or any other tribunal or any circumstance that would warrant deferral of further proceedings in this case. E. In cases other than tax refund actions, will a remand or suspension be sought and, if so, why and for how long? Although Plaintiffs may seek non-adr or ADR settlement negotiations in the future 6

7 after further development of the evidence, Plaintiffs do not intend to do so at this time, and are otherwise unaware of any circumstances that would warrant a remand or suspension in this case. Defendant s Position: Defendant is presently unaware of any case or circumstance that would warrant a remand or a suspension in this case except, should the need arise to accommodate Plaintiffs possible request to conduct ADR/non-ADR settlement negotiations. F. Will additional parties be joined? If so, the parties shall provide a statement describing such parties, their relationship to the case, the efforts to effect joinder, and the schedule proposed to effect joinder. At this time, the parties do not know of any additional parties who will seek joinder. Each of the three Tribal Plaintiffs, Yomba, Timbisha and Duckwater, are federally recognized tribes and members of the Western Shoshone Identifiable Group that are eligible to represent the Western Shoshone Identifiable Group without joinder of any other Western Shoshone Tribes pursuant to 28 U.S.C However, either of two additional Western Shoshone tribal governing bodies, which are members of the Western Shoshone Identifiable Group, or individuals eligible for inclusion on the Western Shoshone Judgment Roll, may seek intervention in this lawsuit upon proper and timely motion pursuant to RCFC Rule 24. Defendant s Position: At this time, Defendant does not know of any additional parties who will seek joinder. As Defendant has set forth in the papers supporting its motion to dismiss the tribal Plaintiffs, however, other Western Shoshone Indian individuals who have beneficial interests in the Western Shoshone Judgment Fund, including those individuals who have protectable interests 7

8 and who are members of some or all nine of the Western Shoshone Tribes or groups of Indians (see, e.g., S.Rep. No at 3-4), may seek joinder in their own right, pursuant to RCFC 20 or 24, in this lawsuit. The participation or adequate representation of those Western Shoshone Indian individuals in this case may be necessary for purposes of a final adjudication, settlement, or ADR of the claims being asserted herein. G. Does either party intend to file a motion pursuant to RCFC 12(b), 12(c), or 56, and, if so, what is the schedule for the intended filing? Plaintiffs are contemplating the filing of a motion for summary judgment on the issue of duty, including the fiduciary standards applicable to Defendant as trustee. Plaintiffs may also file a motion for summary judgment on the issue of liability for Defendant s breach of duty and failure to properly administer the trust funds in accordance with fiduciary standards applicable to Defendant as trustee. Plaintiffs contemplate the sequential filing of such motions pursuant to RCFC 56, including possible motions on other dispositive issues, within 90 days following the close of discovery. Defendant s Position: As to a proposed liability phase, Defendant contemplates the possibility of raising affirmative defenses or other dispositive legal issues by motion pursuant to RCFC 12(b) or 56. Defendant anticipates at this time that such a motions practice could include a challenge to Plaintiffs alleged measures of damages after the Court s determination of liability and in the event that Defendant determines that Plaintiffs alleged measures are not legally viable. In Defendant s experiences with other Tribal trust accounting and trust mismanagement cases involving similar breach of trust claims, Plaintiffs full articulation of their claims, as well as the 8

9 legal and factual bases for those claims, typically do not occur until after Plaintiffs have disclosed expert witnesses and those experts have submitted their final expert reports. Accordingly, Defendant proposes that its expert witness disclosures be required no less than 120 days after Plaintiffs expert disclosures. This will afford Defendant a necessary opportunity to conduct further research, after it has received Plaintiffs expert reports, so as to identify and develop evidence not only to rebut Plaintiffs claims but also to support Defendant s own expert analyses. Without sufficient time to conduct this additional research, Defendant would be prejudiced in its ability to prepare and present an adequate defense in trial proceedings. As soon as the parties have exchanged all expert reports, including rebuttal reports, Defendant proposes that the parties would have 60 days thereafter to complete discovery and to file any legal motions on unresolved issues. H. What are the relevant factual and legal issues? The Plaintiffs preliminary factual and legal issues, subject to revision through further legal and factual development dependent upon further rulings of this Court and discovery, include: 1. The Western Shoshone Identifiable Group, as represented by the named Plaintiffs herein, is entitled to a judgment for money damages necessary to make the Western Shoshone Judgment Fund and Joint Judgment Funds whole; 2. The applicable fiduciary standards of care that are owed to the Plaintiffs by the Defendant, with respect to the funds in the trust accounts, as established by federal statute, regulation and the common law; 9

10 3. The investment, accounting, recordkeeping, reporting, and other practices necessary to achieve compliance with the applicable standards of care and defendant s fiduciary obligations; 4. The Defendant s failure to comply with such standards and obligations and to implement such practices; 5. The Defendant s failure to establish trust fund accounts and properly invest the funds within a reasonable time following the certification of the awards in ICC Dockets 326-K, 326-A-1 and 326-A-3 by the Court Clerk to the office of the Comptroller General, or other office, division, or agency of the United States Treasury; 6. The Defendant s failure to furnish the Plaintiffs with an accounting of Western Shoshone Identifiable Group trust funds from which the Plaintiffs could have determined a loss due to mismanagement of those funds; 7. The Defendant s failure to properly and prudently manage and invest the funds in federally approved instruments and in a manner that would achieve the maximum rate of return on the investments; 8. The Defendant s liability for the breaches of its fiduciary responsibilities owed to the Plaintiffs; and 9. The damages arising from the Defendant s breaches of its fiduciary responsibilities that are necessary to make the Western Shoshone Judgment Fund and Joint Judgment Funds whole for the benefit of the Western Shoshone Identifiable Group. 10

11 Defendant s Position: The precise contours of factual and legal issues depend on Plaintiffs development, prosecution, and proof of sufficiently specific claims of trust fund mismanagement and of resulting damages. Defendant sets forth the following relevant and factual issues based on its present knowledge of Plaintiffs trust fund mismanagement claims: 1. To the extent that Plaintiffs claims are based on specific duties established in substantive sources of law, whether a breach of those duties would mandate the payment of compensation; 2. Whether Plaintiffs have sufficiently alleged that Defendant has failed to perform any specific money-mandating duties; and 3. Whether Plaintiffs assert claims for relief that, if granted, would violate the terms and requirements of the distribution of the Judgment accounts, as set out under the Distribution Act. I. What is the likelihood of settlement? Is alternative dispute resolution contemplated? Plaintiffs believe that potential exists for settlement through ADR or less formal non- ADR settlement negotiations. However, Plaintiffs are not currently contemplating the use of ADR. Plaintiffs believe that the Western Shoshone Identifiable Group is adequately represented by the Plaintiffs in this case. Defendant s Position: Defendant believes that there should be a potential for settlement, ADR, or other 11

12 informal resolution of Plaintiffs claims, without the need for protracted litigation. Thus, Defendant remains open to the possibility of settlement options, including the possibility of staying formal litigation and engaging in informal measures, such as the production of relevant or potentially relevant documents and data about Plaintiffs trust funds, outside of the context of formal discovery or litigation, so as to inform the parties in their settlement, ADR, or informal resolution process. At the same time, however, as discussed in Section F. above, to the extent that not all of the beneficiaries of the Western Shoshone Judgment Fund are represented in this case at this time, the participation or adequate representation of those beneficiaries, including those beneficiaries who have protectable interests, may be necessary for any final settlement or ADR of the claims being asserted herein. J. Do the parties anticipate proceeding to trial? Does either party, or do the parties jointly, request expedited trial scheduling and, if so, why? Although the Plaintiffs remain open to settlement through ADR, or through informal means, the Plaintiffs currently anticipate proceeding to trial. The Plaintiffs believe that the pretrial scheduling should continue as required by the RCFC. The Plaintiffs do not request expedited trial scheduling and do not believe that this case is appropriate for such scheduling. Defendant s Position: Defendant believes that it is possible that legal challenges to Plaintiffs claims, including but not limited to any inappropriate alleged measures of damages that Plaintiffs may propose, can be resolved, in whole or in part, by dispositive motion, rather than a trial on liability issues. As stated by Defendant in its response to Section I above, Defendant remains willing to engage in settlement discussions, ADR, or other means of informally resolving Plaintiffs issues and 12

13 claims without the need for extended litigation. K. Are there special issues regarding electronic case management needs? The parties do not foresee any special issues regarding electronic case management. L. Is there other information of which the court should be aware at this time? Plaintiffs do not believe there is any other information of which the Court should be aware at this time. The Plaintiffs are willing to consider a draft confidentiality or other protective order presented by the Defendant for stipulation by the Plaintiffs. Otherwise, the Defendants should present the need for a confidentiality or protective order by appropriate motion. Defendant s Position: Defendant notes the following for the Court s information: 1. Defendant believes that a protective order may be necessary to enable Defendant to produce to Plaintiffs certain documents and data that contain confidential information (e.g., protected by the Privacy Act). Defendant notes that, as a general matter, the Office of Historical Trust Accounting ( OHTA ) of the Interior Department provides to a Tribe only those materials that relate to that Tribe s results under the Trust Funds Reconciliation project. If, as part of those materials, the Tribes receive documents relating to the trust funds of other Tribes or individual Indians, it is generally because the Tribes have an interest in those funds. Although there are three tribal Plaintiffs and three individual Plaintiffs in this case, there are two other Western Shoshone tribal governments and four other groups of Western Shoshone Indians, who may have an indirect interest, and possibly thousands of Western Shoshone Indian individuals, who have a 13

14 direct interest in the Judgment Fund. 2. One of the two other Western Shoshone tribal governments, i.e., the Te-Moak Tribe of Western Shoshone Indians, has filed a case against the Interior and Treasury Departments in the United States District Court for the District of Columbia, requesting declaratory and injunctive relief, including but not limited to a full and complete historical accounting of the Tribe s trust funds and non-monetary trust assets. Te-Moak Tribe of Western Shoshone Indians v. Salazar, No. 1:05-cv (JR). The district court has administratively closed the case, based on the parties joint representation that they would engage in informal settlement negotiations. Based on the issues and claims raised by the Te-Moak Tribe, the resolution of that case, through litigation, ADR, or informal settlement, may have an impact on the instant case before this Court. 3. As this Court is aware, there is currently a total of 96 Tribal trust accounting and trust mismanagement cases pending in this Court, the United States District Court for the District of Columbia, and the United States District Courts in Oklahoma. Of those 96 cases, about 51 cases are pending before various judges on this Court. M. Proposed Discovery Plan The parties agree by stipulation that the initial disclosures required by RCFC 26(a)(1)(A) shall be provided within 45 days of the filing of this JPSR with the Court. Further, Plaintiffs and Defendant set out their respective proposed discovery plans below. Plaintiffs do not agree with the lengthy discovery plan set forth by the Defendant. Specifically, Plaintiffs do not believe it appropriate for Defendant to have 120 days to analyze 14

15 and rebut Plaintiffs expert witness reports. Plaintiffs believe that 270 days of concurrent discovery leading up to the disclosure and exchange of Plaintiffs and Defendant s expert witness reports will be sufficient. Plaintiffs anticipate the use of document production, interrogatories, requests for admission and depositions of fact witnesses during the discovery period leading up to the disclosure and exchange of the parties expert witness reports. Following the initial disclosure of the parties expert witness reports the parties shall have 90 days to disclose and exchange their rebuttal expert witness reports. Discovery will close 70 days after the initial disclosure and exchange of the parties expert witness reports. If additional time is needed then appropriate motions for good cause may be submitted to the Court to modify the discovery schedule. Defendants Position: Depending on Plaintiffs desired scope of discovery, formal discovery should proceed in two distinct stages and should be conducted in accordance with the RCFC. The first stage would consist of the factual discovery that Plaintiffs may deem necessary. Such discovery should be limited to document productions, interrogatories, and requests for admission. The documents relevant or potentially relevant to Plaintiffs issues and claims herein are possibly located at multiple locations that may include federal records repositories, around the country, however, it is most likely that the vast, if not all, of these documents will be found either at the Bureau of Indian Affairs ( BIA ) Western Regional Office, Western Nevada Agency Office, or the American Indian Records Repository (the AIRR ). In order for Defendant to adequately respond to Plaintiffs discovery requests, if it is determined that the responsive documents are stored at the AIRR, the parties would have to undertake the following 15

16 process: a. The parties would have to identify the boxes that may contain responsive documents; b. The Solicitor s Office of the Interior Department would have to conduct a preinspection privilege review of those identified boxes; c. Plaintiffs counsel would have to inspect the boxes at the AIRR and identify those documents it wishes to have produced; and d. Defendant would have to image, code, and conduct a post-inspection confidentiality and privilege review, before producing the images of the requested documents to Plaintiffs, pursuant to a confidentiality protective order negotiated by the parties and approved and entered by this Court. Until Plaintiffs propound document or other discovery requests, Defendant is unable to estimate accurately the amount of time that the Court should allow to complete discovery for this first stage of discovery. Based on Defendant s experience in other Tribal trust accounting and trust mismanagement cases, depending on the documents requested by Plaintiffs, it likely will take longer than 270 days to complete this production process. The second stage of discovery would begin after Plaintiffs have defined their claims through the work of their experts and the experts reports. Following Defendant s receipt of the Plaintiffs initial expert reports, Defendant proposes that stage 2 discovery would commence and 120 days following commencement of discovery Defendant would exchange its initial reports with Plaintiffs. Discovery would conclude 60 days after the exchange of rebuttal reports. Respectfully submitted this 27th day of February 2009, 16

17 /s/ Thomas E. Luebben /s/ Daniel G. Steele THOMAS E. LUEBBEN DANIEL G. STEELE Luebben, Johnson & Barnhouse, LLP United States Department of Justice th Street, N.W. Environment Division Los Ranchos de Albuquerque, NM P.O. Box 663 Tel: (505) Washington, D.C Fax: (505) Tel: (202) Fax: (202) Attorney of Record for Plaintiff OF COUNSEL FOR PLAINTIFFS: Attorney of Record for Defendant OF COUNSEL FOR DEFENDANT: SAMUEL D. HOUGH ANTHONY P. HOANG Luebben, Johnson & Barnhouse, LLP United States Department of Justice th Street, N.W. Environment Division Los Ranchos de Albuquerque, NM P.O. Box 663 Tel: (505) Washington, D.C Fax: (505) Tel: (202) Fax: (202) MICHAEL BIANCO United States Department of the Interior Office of the Solicitor Washington, D.C REBECCA SALTIEL THOMAS KEARNS United States Department of the Treasury Financial Management Service Office of the Chief Counsel Washington, D.C

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