Issues of the Case

Issues of the Case
There are two points to this case; the first is the source of the problem. The Indian Mineral Lease Act of 1938 allowed Native American tribes the power to lease tribal land for mining purposes with the approval of the Secretary of the Interior. In 1964, the Navajo tribe entered into a contract of lease with the Peabody Coal Mining Company, the contract included an agreement for 37.5 cents for every ton of coal mined and was up for renegotiation in 20 years. When the 20 years came around the tribe’s royalty was only worth 2% of what Peabody was making, also Congress had set a new minimum standard of 12.5% in 1977. Therefore, the tribe requested the Secretary to set a new rate for Peabody, the Director of the Bureau of Indian Affairs acting as a representative for the Secretary made a preliminary decision and set the rate at 20%.

After the temporary rate was set is where we get into our second point of the case, representatives of Peabody urged the Secretary to either reverse the decision or delay it, the Secretary did so and advised both parties to continue negotiation, "I suggest that you inform the involved parties that a decision on this appeal is not imminent and urge them to continue with efforts to resolve this matter in a mutually agreeable fashion." http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=Fed&navby=case&no=005086&exact=1

The two parties ended up settling on a rate of 12.5%, but this isn’t the issue at hand. In 1993 the Navajo Nation sued the United States Government for breach of trust in the Court of Federal Claims, the court ended up ruling in the government’s favor because it is no where stated that the government has a regulatory or statutory obligation even though the Secretary did act in Peabody’s favor. The tribe then took the case to the Court of Appeals saying that general reason for the Indian Mineral Lease Act is for the government to look after the well being of the tribe, this time the Court of Appeals ruled in favor of the tribe. Ultimately, it was decided that while the Secretary should act in benefit of the tribe, the tribe must "identify a substantive source of law that establishes specific fiduciary or other duties." http://www.oyez.org/cases/2000-2009/2002/2002_01_1375/