+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
United States v. Jicarilla Apache Nation, No. 10-382, 2011 BL 154640 (U.S. June 13, 2011) On June 13, 2011, the U.S. Supreme Court held that the fiduciary exception to the attorney-client privilege does not apply to the trust relationship between the U.S. Government and Indian tribes. The Court reasoned that the rationale justifying the fiduciary exception in the private context does not apply when the Government is serving as the trustee for tribal funds.
Jicarilla Apache Nation and Its TrustJicarilla Apache Nation's (Tribe) reservation in New Mexico contained natural resources, including oil and gas reserves, which were developed pursuant to statutes administered by the U.S. Department of the Interior. The U.S. Government held proceeds derived from the resources in trust for the Tribe under the American Indian Trust Fund Management Reform Act of 1994, 25 U.S.C. §§ 4001 – 61, and other statutes. In 2002, the Tribe filed a breach-of-trust action in the U.S. Court of Federal Claims (CFC), alleging that the Government mismanaged its trust funds in violation of 25 U.S.C. §§ 161 – 162a. During discovery, the Tribe moved to compel the production of certain documents that the Government asserted were protected by the attorney-client privilege. The CFC granted the Tribe's motion in part, concluding that departmental communications relating to the management of trust funds fell within the "fiduciary exception" to the attorney-client privilege. Under the exception, which typically applies to common law trusts, a trustee who obtains legal advice related to his exercise of fiduciary duties cannot withhold attorney-client communications from the beneficiary of the trust. According to the CFC, the trust relationship between the United States and the Tribe was sufficiently similar to a common-law trust relationship, and thus the exception applied. As such, the CFC held that the Government was not permitted to withhold from the Tribe communications with attorneys related to the trust. The CFC ordered the Government to disclose documents that involved "matters regarding the administration of tribal trusts, either directly or indirectly implicating the investments that benefit[ed] Jicarilla" and that contained "legal advice relating to trust administration." The Government petitioned the U.S. Court of Appeals for the Federal Circuit for a writ of mandamus directing the CFC to vacate its order. The Federal Circuit denied the Government's request because it believed that the CFC correctly applied the fiduciary exception.
The Fiduciary Exception Did Not Apply to the Trust Relationship between the Government and the TribeThe Supreme Court granted certiorari to "consider the bounds of the fiduciary exception and the nature of the trust relationship between the United States and the Indian tribes." It reasoned that the fiduciary exception was grounded in the notion that the trustee had no independent interest in trust administration and was subject to a general common-law duty of disclosure. The Court explained that this rationale does not apply when the United States is serving as trustee for tribal trusts. In particular, the Court observed that in a private context, a trustee has no stake in the advice it provides regarding a trust. In contrast, however, when the Government serves as trustee for an Indian tribe's trust, it has its own independent interest in implementing federal Indian policy. When the Government seeks legal advice related to the administration of tribal trusts, it establishes an attorney-client relationship related to its sovereign interest in the execution of federal law. That is, "the Government seeks legal advice in a 'personal' rather than a fiduciary capacity." Moreover, the Court explained that the Government must represent "multiple interests" and thus it cannot follow the standards of a private fiduciary:
The trust obligations of the United States to the Indian tribes are established and governed by statute rather than the common law, and in fulfilling its statutory duties, the Government acts not as a private trustee but pursuant to its sovereign interest in the execution of federal law. The reasons for the fiduciary exception . . . do not apply in this context.The Court further elaborated that because the Government exercises its trust responsibilities "in a sovereign capacity to implement national policy respecting the Indian tribes[,] . . . [t]he two features justifying the fiduciary exception—the beneficiary's status as the 'real client' and the trustee's common-law duty to disclose information about the trust—are notably absent" from the trust relationship between the Government and tribes. Accordingly, the Court reversed the judgment of the Court of Appeals and remanded the case for a determination of whether, in light of the Court's opinion, the standards for granting a writ of mandamus were met.
Legal Topics:Evidence Privileges & Protections
DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).