[00:00:00] Speaker 01: Court is case number 191758, Intertribal Council of Arizona versus the United States, an appeal from a decision of the Court of Federal Claims. [00:00:42] Speaker 01: Okay. [00:00:43] Speaker 01: Ms. [00:00:44] Speaker 01: McCoy, you want four minutes for rebuttal? [00:00:46] Speaker 01: Yes, Your Honor. [00:00:48] Speaker 01: Okay. [00:00:48] Speaker 01: You may proceed. [00:00:50] Speaker 00: May it please the Court? [00:00:52] Speaker 00: The Intertribal Council of Arizona is here because in exchange for closing the Phoenix Indian School, Congress mandated Indian Education Trust Fund payments to Arizona Indian Tribes. [00:01:04] Speaker 03: On page 29 of the blue brief, [00:01:07] Speaker 03: ITCA argues that in the government's lawsuit against Collier, quote, the government did not collect, I'm paraphrasing a little bit, and did not seek to collect the full value of all remaining payments due once Collier defaulted. [00:01:24] Speaker 03: Can you provide a site to the act or otherwise supporting the imposition of a duty upon the government to collect, quote, all payments from Collier? [00:01:37] Speaker 03: How does any such duty relate to the government's duty to hold and trust security against Collier's obligations, which I think is a separate issue? [00:01:48] Speaker 03: How do they interrelate? [00:01:49] Speaker 00: Yes, Your Honor. [00:01:51] Speaker 00: The act at section 403C2, which is in the appendix at 111, [00:01:58] Speaker 00: says that there shall be made 30 annual payments equal to the interest due under the 30-year payment option. [00:02:13] Speaker 00: And even though the statute says that collier shall make those, those are to be made to the United States. [00:02:18] Speaker 00: So therein lies the duty to collect. [00:02:22] Speaker 00: And Your Honor asked about the duty to secure [00:02:24] Speaker 00: which is, of course, in Section 405C2, which is in the appendix at 115. [00:02:31] Speaker 00: That's the key term, which says that the Secretary of the Treasury shall hold in trust the security for the annual payments and for the final payment under the 30-year payment option. [00:02:45] Speaker 00: So there are two separate clauses. [00:02:47] Speaker 03: I know that. [00:02:48] Speaker 03: I want to know about how they interact with each other. [00:02:53] Speaker 03: From my view, one, [00:02:54] Speaker 03: is a harder road than the other. [00:02:58] Speaker 00: Yes, Your Honor. [00:02:59] Speaker 00: The collection duty would be a little bit more implicit, but it could be from, as I said, the statute requires Collier to make the payments to the United States. [00:03:12] Speaker 00: That's the implicit duty to collect. [00:03:15] Speaker 00: The security duty is far more expressed, as Your Honor says. [00:03:17] Speaker 03: I understand. [00:03:20] Speaker 03: That's why I'm concerned about the first, the collection. [00:03:27] Speaker 00: Yes, Your Honor. [00:03:28] Speaker 03: Is there, for example, a statutory history that places a unique burden on the government? [00:03:37] Speaker 00: In this statute, it's a very unique burden on the government. [00:03:42] Speaker ?: I know. [00:03:42] Speaker 03: In part. [00:03:43] Speaker 03: But go ahead. [00:03:44] Speaker 00: Well, and as Your Honor said, the United States could have chosen to collect. [00:03:49] Speaker 00: all the payments from Collier. [00:03:51] Speaker 00: What the United States did vis-a-vis Collier is what the United States did vis-a-vis Collier. [00:03:56] Speaker 00: But that doesn't in and of itself eliminate or reduce the statutory duties on the United States. [00:04:02] Speaker 01: It is true that at the end of the day after the lawsuit was filed and there was a settlement, the total amount of payments due from Collier were not recovered. [00:04:10] Speaker 01: But what is your support for the proposition that they never even sought to recover the total payments? [00:04:17] Speaker 00: Because in US versus Collier, the United States was of the view that it needed to enforce the contractual terms that it had agreed to with Collier to supplement the security for the payments that Collier had not made up until the point in time of the settlement, the default to the settlement. [00:04:43] Speaker 00: In other words, the United States was of the view [00:04:46] Speaker 00: that Collier only owed what was due under the contractual, or that Collier was only required to supplement the security up until the point of default and the settlement in the case. [00:04:59] Speaker 00: The US did not seek to collect the payments, the full 30 years of payments. [00:05:05] Speaker 00: The United States' view is that whenever Collier defaults, the default eliminates the remaining unpaid required payments. [00:05:14] Speaker 00: That's their view. [00:05:16] Speaker 00: So that's what they sought to collect. [00:05:18] Speaker 00: And that fell short. [00:05:20] Speaker 00: And the United States didn't have the security to make the trust funds whole with the required 30 annual and single final payments under the Act. [00:05:31] Speaker 01: What's your response to the argument that with respect to the security, you had already filed a lawsuit much earlier saying the security is not good enough and the court had ruled and said that there was no [00:05:43] Speaker 01: there was no jurisdiction for the court to address that fact. [00:05:49] Speaker 00: Yes, Your Honor. [00:05:50] Speaker 00: The terms of the security that the U.S. [00:05:53] Speaker 00: agreed to with Collier did fall short of what the act required. [00:05:59] Speaker 00: And the Intertribal Council of Arizona knew that and was very concerned. [00:06:03] Speaker 00: The difference is, as Your Honor said, those claims were precluded from being heard by the district court. [00:06:11] Speaker 00: But that doesn't [00:06:13] Speaker 00: preclude claims for damages against the United States. [00:06:17] Speaker 00: As the United States told the district court in Lujan, in part to get the result that it got, the claims for damages are not precluded in the Court of Federal Claims because they are a different cause of action. [00:06:33] Speaker 00: There was no preclusion under the law. [00:06:37] Speaker 00: I think that's the Mosley and the Krall cases that we cite. [00:06:40] Speaker 00: And there was no collateral estoppel because they were never actually and fully and fairly litigated, the typical requirements of collateral estoppel. [00:06:48] Speaker 00: And more importantly, in 1992, when the Lujan case was decided, we were even four years away from Collier starting to make payments. [00:06:58] Speaker 00: As long as Collier was making payments, there was the possibility that the United States correctly understood the act and could correctly secure all the payments [00:07:08] Speaker 00: that were required under the Act. [00:07:09] Speaker 00: They had the tools to do that. [00:07:11] Speaker 00: When it became clear that they didn't, that occurred after Collier stopped paying in 2011. [00:07:18] Speaker 00: And when the United States disclosed to ITCA in March of 2013 that Collier had defaulted and the security was insufficient, those are the events that fixed the liability of the United States. [00:07:34] Speaker 00: As long as Collier was paying, [00:07:36] Speaker 00: It didn't really matter. [00:07:37] Speaker 00: But the United States never disclosed to ITCA that the security was deficient. [00:07:43] Speaker 00: Not after liens were released in 1998 and 2007. [00:07:48] Speaker 01: ITC knew that the liens were released, right? [00:07:51] Speaker 00: They did not, Your Honor. [00:07:52] Speaker 00: No. [00:07:53] Speaker 00: Never knew. [00:07:54] Speaker 00: Had no idea until post-2013 as this litigation was being developed. [00:08:01] Speaker 00: No. [00:08:01] Speaker 00: Nothing in the documents that the United States [00:08:04] Speaker 00: negotiated with Collier required the United States to inform ITCA of the value, the actual level of the security. [00:08:13] Speaker 01: But there was in the contract the fact that the United States agreed to release liens. [00:08:18] Speaker 00: Yes, Your Honor, that is true. [00:08:20] Speaker 00: But there was no, in fact, the United States completely disavows that ITCA had any role in negotiating the documents or any beneficial interest in the things that were negotiated in those documents. [00:08:34] Speaker 00: The United States did not, of its own volition, provide information to ITCA. [00:08:39] Speaker 00: Moreover, because the United States chose real property and real property interests as the security required by Congress for these trust fund payments, the valuation was always fluctuating. [00:08:53] Speaker 00: The United States did not hold liquid security. [00:08:57] Speaker 00: It held real property. [00:08:59] Speaker 00: In Phoenix, that was a volatile thing to do. [00:09:04] Speaker 00: But the United States never did anything that could have required, under its own terms, it could have required Collier to supplement the security in 1998 when it did the first lien release. [00:09:19] Speaker 00: It could have required Collier to supplement the security in 2007. [00:09:22] Speaker 00: It could have required Collier to supplement the security in 2008 when there was a major economic [00:09:28] Speaker 00: downturn that diminished, depleted the value of the security, as Collier knew himself when he tendered the property and when he defaulted. [00:09:38] Speaker 00: In Collier's own words, and only Collier ever did appraisals on these properties, it was $6 million. [00:09:45] Speaker 00: That's why the United States turned that down and sued Collier for a little bit more. [00:09:49] Speaker 00: But we're still short. [00:09:54] Speaker 00: This is a very unique act of Congress. [00:09:58] Speaker 00: The United States at the height has operated over 350 Indian boarding schools in this country. [00:10:05] Speaker 00: Never before with the closure of one of these schools has Congress turned the value of the property underlying the school into mandatory trust fund payments for Indian education. [00:10:19] Speaker 00: That is the testament to how Congress recognized the value of this property, which as the [00:10:26] Speaker 00: General Accounting Office stated was quite possibly the most valuable piece of property in the late 1980s in the Western United States. [00:10:37] Speaker 00: And Congress recognized that and turned it into this very specific payment and security scheme that is unlike many other statutes, although it's close. [00:10:50] Speaker 03: You have another minute before you run into your rebuttal time. [00:10:53] Speaker 03: Aren't you going to mention the word fiduciary? [00:10:58] Speaker 00: Yes, Your Honor, I will. [00:11:00] Speaker 00: The United States has fiduciary duties imposed on it by Congress under this statute. [00:11:06] Speaker 00: And they are in breach of those. [00:11:08] Speaker 00: And like in White Mountain Apache, which is a close comparable statute, hold in trust, the United States is liable for breach of those fiduciary duties, which Congress put full control in the United States to comply with. [00:11:23] Speaker 00: And they chose not to. [00:11:25] Speaker 00: That's why we're here. [00:11:26] Speaker 01: How much would have been [00:11:28] Speaker 01: the appropriate security under the Act? [00:11:31] Speaker 00: The answer to that, Your Honor, is whatever it takes to secure any and all unpaid remaining payments at any time. [00:11:39] Speaker 00: Now, the payments are- At 130%, though. [00:11:43] Speaker 00: Yes, Your Honor, the United States itself realized that it needed to enhance the security requirements because it agreed to those lien releases, again, on volatile fluctuating value real property interests. [00:11:58] Speaker 00: So yes, they enhanced their own requirement and still didn't meet it. [00:12:05] Speaker 01: OK, I'll save the rest for our bottom. [00:12:15] Speaker 03: May it please the court, Phil Seligman from the United States. [00:12:18] Speaker 03: When did the government first become aware that Collier's debt was under collateralized? [00:12:27] Speaker 02: I guess it's not clear when we actually learned that it was weak. [00:12:33] Speaker 02: They sent a letter to the United States at the time that they notified that they were no longer going to make any payments in 2012. [00:12:40] Speaker 02: And they notified at that time that the value of the property had gone down so much that it was only worth $6 or $7 million. [00:12:49] Speaker 02: And at that time, obviously, that is under collateralized. [00:12:53] Speaker 02: But the way the collateral was set forth [00:12:58] Speaker 03: Do you agree that the United States was in a fiduciary relationship? [00:13:04] Speaker 02: The only fiduciary relationship the United States had was to collect the payments made by Baron Collier and deposit them into the trust. [00:13:12] Speaker 02: That's the fiduciary relationship. [00:13:14] Speaker 01: But the act provides for collateral being secured. [00:13:19] Speaker 02: Well, no, there is no statutory obligation in the 1988 act that the United States obtain or maintain any level of security. [00:13:30] Speaker 02: The Congress left it up to the Secretary how much security would be. [00:13:37] Speaker 02: Soybean futures? [00:13:39] Speaker 02: Soybeans. [00:13:40] Speaker 02: It was entirely up to the Secretary. [00:13:43] Speaker 02: Now, what the Secretary chose to do was target [00:13:46] Speaker 02: the principal instead. [00:13:48] Speaker 02: That's what the real dispute is about, whether you target the principal value, which is $34.9 million, or whether you, as ITCA alleges, you had to target security at 30 years of interest payments plus the principal, which would get you. [00:14:03] Speaker 02: So we're talking about $34.9 million. [00:14:04] Speaker 01: But the interest payments were a critical part of the benefit to ITCA, right? [00:14:11] Speaker 02: Obviously, Congress had, in the 1988 act, it had quite a few different purposes for the act. [00:14:17] Speaker 02: It wasn't just about providing supplemental money for education. [00:14:25] Speaker 03: Doesn't the act require that the property be held in trust for the benefit of the ITCA? [00:14:31] Speaker 02: No. [00:14:31] Speaker 02: There's no provision that requires the property. [00:14:35] Speaker 02: It's simply that whatever security the United States obtained [00:14:39] Speaker 02: in the trust fund payment agreement, the agreement that it had with Collier, there's a requirement that it hold that security in trust. [00:14:48] Speaker 02: And there's no allegation that the United States didn't hold the security it obtained. [00:14:53] Speaker 02: The dispute is about whether it obtained enough security, whether, again, the target should be $34.9 million, the principal, which, as we learned, Congress wasn't operating in a vacuum. [00:15:06] Speaker 02: a CBO analysis, which shows if you get $34.9 million at the beginning over 30 years, that's worth the exact same amount as having 30 payments at 8.5% interest. [00:15:18] Speaker 03: Let me ask you a hypothetical question. [00:15:20] Speaker 03: Supposing I read the act as having required that the United States hold the property in trust. [00:15:32] Speaker 03: That would create a fiduciary obligation, a fiduciary relationship, and allow monetary damages for breach of that, would it not? [00:15:42] Speaker 02: Well, I guess, first, the premise is that this was federal property. [00:15:48] Speaker 02: I think that's one of the biggest distinctions between this and other Indian trust cases. [00:15:53] Speaker 02: This was entirely federal property, and the only amount [00:15:59] Speaker 02: money that was going to ITCA was based on the differential between the property that Baron Collier owned in Florida and the Indian school property. [00:16:08] Speaker 02: So the entire Indian school property was worth their own. [00:16:11] Speaker 03: And interest. [00:16:11] Speaker 02: Yeah, each of the payments. [00:16:14] Speaker 02: But I'm saying the property itself was worth $80 million, the Indian school property. [00:16:19] Speaker 02: Congress did not identify that $80 million should be put into trust for. [00:16:26] Speaker 02: So it wasn't the entire value. [00:16:29] Speaker 02: What was put into trust was either $34.9 million up front or 30 years of payments plus $34.9 million. [00:16:36] Speaker 01: But really what was supposed to be the security was supposed to be the 130%. [00:16:40] Speaker 01: And so my question is, at the time you released the liens, which seemed like sort of a silly thing to do, frankly, but why release liens on very valuable property in downtown Phoenix? [00:16:55] Speaker 01: But at the time you released the liens, did the government confirm [00:16:59] Speaker 01: that there was enough security to cover 130% of the value of the payments? [00:17:05] Speaker 02: Yes. [00:17:06] Speaker 02: Well, that's not what 130% was. [00:17:08] Speaker 02: Again, it gets back to what the target is. [00:17:10] Speaker 02: Well, there's two things sort of tied up in that question. [00:17:12] Speaker 02: One is it wasn't a question of silly or not. [00:17:15] Speaker 02: The United States was obligated to do it under the Trust Fund Payment Agreement. [00:17:19] Speaker 02: It was obligated to release liens if you showed that the release level amount had been reached. [00:17:27] Speaker 02: And the release level amount was [00:17:29] Speaker 02: crude interest payments. [00:17:32] Speaker 02: So if they were behind on any payments, you add that in. [00:17:35] Speaker 02: Plus unpaid principal, which is $34.9 million. [00:17:39] Speaker 02: And then you subtract out the value of whatever the property is, whatever liens there are, and you subtract out the annuity. [00:17:47] Speaker 02: So the question is, if you're over that target, and again, it's 130% of that, then Collier would have to, if it falls below that level, Collier had to infuse [00:17:59] Speaker 02: collateral to get the value back up. [00:18:02] Speaker 02: So at the time of the release of the liens in 1998 and 2007, there was no evidence that the value of the security had fallen below the level that was agreed to with the Trust Fund Payment Agreement. [00:18:15] Speaker 02: The dispute is about whether the target was proper or not. [00:18:19] Speaker 02: That's what ITCA alleges that the United States had to target this $100 million [00:18:24] Speaker 02: If you do the math, it's about $123 million, almost $124 million, because that's 30 years of payments plus the 34.9. [00:18:31] Speaker 01: Yeah, it's a classic present value analysis. [00:18:35] Speaker 01: I mean, you're saying that it's $34 million, but you're not going to get it for 30 years. [00:18:39] Speaker 01: So of course there has to be other value. [00:18:41] Speaker 01: Because 34 million can't be the bogey if you have to wait 30 years for it. [00:18:46] Speaker 02: Well, no. [00:18:47] Speaker 02: It would be under a default. [00:18:49] Speaker 02: It would be 34.9 million right now, and then it gathers interest for 30 years on 34.9 million. [00:18:56] Speaker 02: That's what the CBO analysis was, is that 34.9 million right now at day one is equal to 34.9 million plus 30 years of interest. [00:19:07] Speaker 02: Plus all the interest, right. [00:19:09] Speaker 02: Those are equivalent. [00:19:10] Speaker 02: So if you get collateral for $34.9 million on day zero and Baron Collier defaults on day zero, you will have the exact same amount 30 years later. [00:19:24] Speaker 02: So we still haven't gotten to the end of the 30 years. [00:19:26] Speaker 02: And the only reason we're having this dispute is because interest rates went down since 1988. [00:19:32] Speaker 02: At the time of 1988, they were in the 8.5% to 10% range. [00:19:37] Speaker 03: That can't be the only reason. [00:19:39] Speaker 03: In the government's suit against Collier, the government in Collier stipulated that the value of the remaining Phoenix Indian School property was $25 million. [00:19:51] Speaker 03: But the GSA sold it for $18.5 million. [00:19:54] Speaker 02: Well, that's another example of what happens with security. [00:19:57] Speaker 02: When you have, obviously, at the time, as a trustee, you can't [00:20:02] Speaker 02: All you can do is have an appraisal, and that gives you the value of the property. [00:20:06] Speaker 03: Did you make a Rule 60B motion in the district court in Arizona to reopen based on mutual mistake? [00:20:14] Speaker 02: Well, there wouldn't have been because the case was resolved by a settlement. [00:20:18] Speaker 02: At the time in Arizona, we used the formula from the contract, which is 100. [00:20:24] Speaker 02: We were filing suit to require a supplement of the collateral [00:20:31] Speaker 02: And so at the time, all we can do is, any time you have land value, use an appraisal. [00:20:36] Speaker 02: And that's the best estimate of the value. [00:20:38] Speaker 02: Obviously, once you actually have a sale later, the market value can be different. [00:20:43] Speaker 02: So there's an appraisal done that's both Baron Collier and the United States that comes up with $25 million. [00:20:48] Speaker 02: And then when GSA actually sells it, it only gets it $18.5 million. [00:20:52] Speaker 02: There's no case law that would make the United States a guarantor for the value [00:20:58] Speaker 02: of the fallen value of the property. [00:21:04] Speaker 02: I'm saying if you accept, if the hypothetical is that there is a fiduciary duty, you still can't make the United States a guarantor under any circumstances. [00:21:13] Speaker 02: But the key is to look in whether there actually is an obligation in the statute. [00:21:18] Speaker 02: And I think that's where the place to start is to actually find any provision. [00:21:23] Speaker 02: And there is no statutory provision that requires the United States to obtain or maintain any level of [00:21:28] Speaker 02: of security. [00:21:31] Speaker 03: You previously referred to the 130% and the lien releases. [00:21:38] Speaker 03: The deed of trust allowed Collier to request release of portions of the trust state if the value exceeded 130%. [00:21:48] Speaker 03: Who negotiated that term? [00:21:51] Speaker 02: Well, that was a negotiation back and forth between Collier and the United States. [00:21:55] Speaker 02: It was [00:21:56] Speaker 02: But if you're going to look at the release level amount, you have to also look at it in conjunction with the maintenance of supplemental collateral in 6.3. [00:22:04] Speaker 02: That's what the United States. [00:22:05] Speaker 02: That also is essentially a form of security that the United States has, which is if the value of the security, and again, we're talking about land. [00:22:13] Speaker 02: If the value of the land goes down, the United States negotiated the burden on Collier to then supplement [00:22:21] Speaker 02: the trust estate with government-backed securities to bring the value back up to where it should have been. [00:22:27] Speaker 03: And if Collier didn't do that, you know... Assuming that the government was a figure-sharing hand, as it concerns the requirement to hold in trust security against Collier's obligations under the promissory note, if you're holding it in trust, how do you release the liens [00:22:50] Speaker 03: on that downtown development interest. [00:22:55] Speaker 03: I know you're saying, well, we were happy. [00:22:58] Speaker 03: But it's not a we were happy standard. [00:23:00] Speaker 03: It's a fiduciary standard. [00:23:03] Speaker 02: The key is to look back at what the language is. [00:23:06] Speaker 02: And if you're going to find a fiduciary responsibility, the only place you can find it is in the provision that says hold in trust the security provided in the trust fund payment agreement. [00:23:17] Speaker 02: And again, trust fund payment agreement did not [00:23:19] Speaker 02: exist at the time that that language was put into the statute. [00:23:23] Speaker 02: So the United States, because the statute left entirely up to the secretary what the level of security would be. [00:23:32] Speaker 02: And so then that is part of the security that the United States negotiated. [00:23:36] Speaker 02: It's both this release level amount. [00:23:39] Speaker 02: It's the obligation to supplement it. [00:23:41] Speaker 02: But it's also a you must release the liens if it is at a certain level. [00:23:45] Speaker 02: So that is all part of the terms of the trust fund payment agreement, which if you, again, do find that particular language that says hold in trust in accordance, you can't leave out. [00:23:55] Speaker 02: If you'll notice in the briefing, into that sentence is left out of all the times that ITCA quotes the statute, which is in accordance with the trust fund payment agreement. [00:24:05] Speaker 02: So the act was not just [00:24:07] Speaker 02: hold security and nebulous, it was hold security in accordance with the trust fund payment agreement. [00:24:14] Speaker 01: And under that trust fund payment agreement, I'm still having a hard time. [00:24:18] Speaker 01: Whose obligation was it to monitor the level of the security? [00:24:23] Speaker 02: Baron Collier. [00:24:23] Speaker 02: The Baron Collier had an obligation to monitor. [00:24:25] Speaker 02: And if they didn't, which, as it turned out, they didn't hear, when they default, [00:24:31] Speaker 02: the United States can then sue and get the collateral back up to the level that had been. [00:24:36] Speaker 01: Well, it's a little bit like the fox and the chicken coop, right? [00:24:38] Speaker 01: I mean, they got to pay attention. [00:24:40] Speaker 01: They were supposed to monitor it. [00:24:41] Speaker 01: And while it just kept diminishing, the government wasn't requiring any kind of reports or anything? [00:24:49] Speaker 02: Well, the government has the benefit of being able to sue and require them to add government-backed securities to bring the level back up. [00:24:56] Speaker 01: But it took them a long time before they filed suit, right? [00:24:59] Speaker 02: No, the United States, we sued within a year and a half after they notified that they were no longer going to make any payments. [00:25:07] Speaker 02: And so again, with land in the trust estate, the land value obviously can fluctuate. [00:25:16] Speaker 02: And even as here, you can have an appraisal. [00:25:19] Speaker 02: And then when the actual market value, when it's sold, it can be less. [00:25:22] Speaker 02: So the key was having this maintenance of collateral provision that allowed the United States to then get [00:25:29] Speaker 02: require Baron Collier to supplement, to bring it back up. [00:25:34] Speaker 02: The dispute, again, is not about the issue of whether we can require supplemental security. [00:25:43] Speaker 02: The main dispute here is about what should have been the original target. [00:25:46] Speaker 02: Should it have been the principal, or should it have been four times that, $123 million for how much security negotiated? [00:25:56] Speaker 02: And Congress left it up to the Secretary as to what [00:25:59] Speaker 02: a level would be negotiated for and then required that the United States hold whatever security it negotiated, hold it in trust. [00:26:11] Speaker 02: How did the United States acquire that property originally? [00:26:15] Speaker 02: I only know from the record that it was 1891. [00:26:17] Speaker 02: I obviously don't know exactly which tribe or group of tribes may have had it or may have [00:26:25] Speaker 02: separately been owned. [00:26:26] Speaker 02: I do not know the history of before 18. [00:26:28] Speaker 02: I know since 1891, it was federal property. [00:26:30] Speaker 02: And the Ninth Circuit noted specifically in its decision back in 1995, after the first time ITCA tried to sue about the inadequacy of collateral. [00:26:41] Speaker 02: The Ninth Circuit noted specifically the various interests that were involved in this land exchange. [00:26:50] Speaker 02: There was a veterans hospital that was going to be used on the site. [00:26:54] Speaker 02: that this was the only statute involved here that could possibly create any fiduciary duty is the 1988 Act. [00:27:02] Speaker 02: There was no earlier general trust obligation to Native Americans or Indian tribes at the time that would apply to any of the issues here. [00:27:13] Speaker 02: And again, ITCA doesn't identify any other possible statutes. [00:27:16] Speaker 02: So if you're going to find an obligation, I see my time is up. [00:27:19] Speaker 02: If you're going to find any obligation, you can only find it in the 1988 act, and it doesn't exist. [00:27:26] Speaker 03: I was curious whether the government acquired it under the 1868 treaties, and from whom. [00:27:32] Speaker 03: But if you don't know, you don't know. [00:27:34] Speaker 02: I don't know. [00:27:35] Speaker 02: I'm certain perhaps ITC knows, but I do not know. [00:27:38] Speaker 01: OK, thank you. [00:27:43] Speaker 01: Do you know the answer to that question? [00:27:45] Speaker 00: Your Honor, I do. [00:27:47] Speaker 00: When there was going to be an Indian school, it was originally going to be at Fort McDowell, another former military site. [00:27:54] Speaker 00: The city of Phoenix wanted the school more centrally located because of the labor source that the Indian children would provide. [00:28:01] Speaker 00: So the city of Phoenix sold the land to the United States. [00:28:07] Speaker 00: And I also wanted to clarify in response to Your Honor's question, [00:28:11] Speaker 00: In our complaint, which is at appendix 072 paragraph 182, the United States admits the security was insufficient as of 2007. [00:28:21] Speaker 00: That came out. [00:28:26] Speaker 00: So what's the site for that? [00:28:28] Speaker 00: I'm sorry. [00:28:29] Speaker 00: I just flipped back from it. [00:28:30] Speaker 00: It's in the appendix at 072. [00:28:33] Speaker 00: It's in our complaint at paragraph 182. [00:28:37] Speaker 00: the citation to when the United States now admits it knew the security was insufficient as early as 2007 and 2008. [00:28:43] Speaker 00: I think we drew that from the Collier case. [00:28:46] Speaker 03: What about the language of the act? [00:28:49] Speaker 03: I asked that question. [00:28:52] Speaker 00: You're free. [00:28:53] Speaker 00: So that provision about the Secretary of the Treasury holding in trust in accordance with the trust fund payment agreement. [00:29:05] Speaker 00: So the trust fund payment agreement had to comply with the act. [00:29:12] Speaker 00: The act does require a trust fund payment with the 30-year option. [00:29:15] Speaker 00: But that trust fund payment had to comply with the act. [00:29:19] Speaker 00: The act reflects Congress's understanding that it knew Collier could default at any time under the 30-year option. [00:29:29] Speaker 00: And it's pretty simple. [00:29:30] Speaker 00: 30 years of annual payments and a final payment at the end. [00:29:33] Speaker 00: That is what had to be fully secured because Congress knew. [00:29:37] Speaker 03: Yeah, I'm interested in the fiduciary obligation. [00:29:41] Speaker 00: It is a fiduciary obligation. [00:29:43] Speaker 00: And not only that, it put full control in the United States to comply with the fiduciary obligation. [00:29:55] Speaker 03: Well, it not only put full control. [00:29:57] Speaker 03: My concern is that having full control, [00:30:04] Speaker 03: fiduciary failed to notify the beneficiaries of any problems. [00:30:12] Speaker 03: So how much did your clients have to know? [00:30:18] Speaker 03: And as far as I can tell from the record, the government's position was nothing. [00:30:24] Speaker 00: That's correct, Your Honor. [00:30:28] Speaker 00: The government, as it was required to do under the act, consulted with ITCA and the Navajo Nation regarding the payment option. [00:30:36] Speaker 00: Beyond that, the government was in full control and negotiated the terms with Collier, including no personal recourse, which made it all the more important that the security that the United States under this act was required to hold met the obligations of the act. [00:30:53] Speaker 01: Under the trust fund payment agreement, [00:30:55] Speaker 01: Do you agree that it was Collier's obligation to monitor the security? [00:31:01] Speaker 00: Yes, Your Honor, I agree that. [00:31:02] Speaker 00: That is a contractual term between the United States and Collier. [00:31:06] Speaker 00: And I think that was part of the court's opinion in the district court in the US v. Collier case, that it was somehow an assigned, I don't think that the court there got into it. [00:31:17] Speaker 00: I don't think that under this act, there's any authority for the United States to assign any of the security duty to [00:31:25] Speaker 00: Collier, but to the extent it was a valid assignment, it just doesn't relieve the United States of its statutory obligations to hold the security, the required level of security and trust, so that any time during that 30 years, that's all they had to do. [00:31:40] Speaker 01: But what's your response to the statement that it's really a, it depends on what your target is, so that in other words, the government says all they had to do is have security for 34 million, not for 34 million plus the interest payments. [00:31:54] Speaker 00: Your Honor, that is absolutely incorrect under the Act. [00:31:57] Speaker 00: They had to have security for all 30 annual payments and the final payment. [00:32:01] Speaker 00: That's the payment scheme of this Act, and all the United States had to do was secure it. [00:32:06] Speaker 00: That's all they had to do, and they didn't. [00:32:10] Speaker 00: I see my time is almost up. [00:32:12] Speaker 00: Thank you, Your Honors.