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Indian Nations Law Update - January 2011

January 10, 2011

Supreme Court Grants Certiorari in Jicarilla Trust Case

On Friday, January 7, the U.S. Supreme Court agreed to review the decision of the Federal Circuit Court of Appeals in the case of In re United States, 590 F.3d 1305, (Fed, Cir. 2009). The Jicarilla Apache Nation had sued the government for breach of its fiduciary trust obligations. In the course of litigation, the tribe sought discovery of documents relating to the government's alleged mismanagement of trust assets. The government disclosed some documents but claimed attorney-client privilege as to communications between the government and its attorneys, arguing that (1) the fiduciary exception should not apply to its duties to tribes because the United States has competing interests to consider when administering the trust, (2) the payment for the legal services did not come from the trust corpus, and (3) applying the trustee exception to the attorney-client privilege would improperly impair its ability to seek confidential legal advice. When the trial court denied the claimed privilege, the government filed a petition for a writ of mandamus in the Federal Circuit Court of Appeals, which denied the writ: "We hold that the United States cannot deny an Indian tribe's request to discover communications between the United States and its attorneys based on the attorney-client privilege when those communications concern management of an Indian trust and the United States has not claimed that the government or its attorneys considered a specific competing interest in those communications."

The Supreme Court will consider "Whether the attorney-client privilege entitles the United States to withhold from an Indian tribe confidential communications between the government and government attorneys implicating the administration of statutes pertaining to property held in trust for the tribe." No date has been set for arguments or briefs.

Congress Approves Cobell Settlement but Fails to Pass Carcieri Fix and HEARTH Act

On December 8, the President signed into law the Claims Resolution Act of 2010, Pub. L. 111-291, which includes appropriation of funds required to carry out the $3.4 billion court settlement reached a year ago in the Cobell class action suit brought by owners of individual Indian money accounts alleging mismanagement by the federal government of individual trust lands and revenue received for the use of trust lands by third parties. The lawsuit establishes a fund for distribution to class members as compensation for historical accounting claims and a $2 billion fund for the purchase and consolidation of highly fractionated land interests.

The proposed "clean fix" to the Supreme Court's decision in Carcieri, which limits acquisitions of land in trust under the Indian Reorganization Act to tribes under federal jurisdiction as of June 18, 1934, failed to pass before the expiration of the 111th Congress. The far less controversial Helping Expedite and Advance Responsible Tribal Homeownership Act (HEARTH Act) (S. 3235), which would give tribes that have BIA-approved leasing ordinances the authority to issue leases without further BIA approval, also failed to pass. Both bills will likely be reintroduced in the 112th congress. Prospects for passage are uncertain, particularly with respect to the Carcieri fix, which become embroiled in controversy over off-reservation gaming.

Congress Approves Indian Country Tax Breaks

At the end of the 111th Congress, the Congress passed and the President signed into law the Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010, Pub. L. 111-312. At the core of this massive legislation was a compromise pursuant to which the President agreed to extend the "Bush tax cuts" for two years and raise the estate tax exemption to $5 million in exchange for an agreement by Senate Republicans to extend unemployment compensation benefits. The act includes an extension of two tax incentives intended to promote economic development in Indian country. Section 732 extends for one year the Indian Employment Credit, which provides a credit against corporate taxes for a portion of wages paid to employees who are tribal members or spouses of tribal members if certain conditions are met. Section 739 extends for one year special depreciation rules that apply to qualified property that is placed in service on an Indian reservation. A bill that would have made both tax benefits permanent failed.

Godfrey & Kahn works with tribes to take advantage of these and numerous other tax incentives, including New Markets Tax Credits, Low Income Housing Tax Credits, Investment Tax Credits, Renewable Energy Credits and others to promote economic development in Indian country. For more information, contact Brian Pierson at (414) 287-9456 or

HUD Announces Availability of Rural Innovation Funds

The Rural Innovation Fund Program, a successor to the defunct Rural Housing and Economic Development (RHED) program, sets aside $25.75 million from the Community Development Block Grant Program for grants to tribes, state housing finance agencies, state community and/or economic development agencies, local rural nonprofits and community development corporations to address the problems of concentrated rural housing distress and community poverty. Out of the total $25 million appropriated, $5 million is reserved "to promote economic development and entrepreneurship for federally recognized Indian Tribes, through activities including the capitalization of revolving loan programs and business planning and development" and for "technical assistance to increase capacity through training and outreach activities." The grant application period begins December 22, 2010. Applications are due February 22, 2011.

New Indian Affairs Committee in House of Representatives

Chairman Doc Hastings (R-WA) and the new leadership of the House Committee on Natural Resources have reorganized the committee and created the new Subcommittee on Indian and Alaska Native Affairs. The subcommittee will have oversight on all matters regarding Native Americans, including gaming, treaty rights, federal recognition, land and water issues, economic development and law enforcement. Congressman Don Young (R-AK) will chair the subcommittee and Congressman Dale Kildee (D-MI) will be the ranking member. Godfrey & Kahn looks forward to engaging with the members and staff of the new subcommittee. Please contact Carl Artman at (202) 628-0305 (Washington, D.C. Office) or for further information about the jurisdiction of the subcommittee or the Godfrey & Kahn Indian Nations Practice Group - legislative and administrative affairs team.

Carl Artman to Speak at Clean Air and Sustainability Conference

Carl Artman will speak on Renewable Energy Development in Indian Country at Clearing the Air: Clean Air, Climate Change and Sustainability conference Arizona State University in Tempe, Arizona on January 14, 2011. The conference is sponsored by The Arizona State Law Journal. Godfrey & Kahn has been at the forefront providing a full spectrum of legal services to tribal clients for state and federal regulations in areas such as energy, air quality, water quality, waste management and site remediation. Godfrey & Kahn is a leader in emerging issues such as climate change, legislation and renewable energy initiatives. Along with supporting our tribal clients' environmental needs, Godfrey & Kahn and its attorneys are committed to improving the environment in the communities we live in. Please contact Carl Artman at for further information on the conference or the Godfrey & Kahn's Indian Nations and Environment & Energy Strategies Practice Groups.

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