August 4, 1994, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 2506 words
HEADLINE: TESTIMONY AUGUST 4, 1994 PETER R. STEENLAND APPELLATE SECTION CHIEF, ENVIRONMENT AND NATURAL RESOURCES DIVISION DEPARTMENT OF JUSTICE SENATE ENERGY/WATER AND POWER WATER RESOURCES ISSUES AND JOINT INDIAN AFFAIRS COMMITTEE ON COLVILLE TRIBES RESERVATION SETTLEMENT
PETER R. STEENLAND
APPELLATE SECTION CHIEF
ENVIRONMENT AND NATURAL RESOURCES DIVISION
COMMITTEE ON INDIAN AFFAIRS
COMMITTEE ON ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
CONFEDERATED TRIBES OF THE COLVILLE RESERVATION
GRAND COULEE DAM SETTLEMENT ACT
AUGUST 4, 1994
Mr. Chairman and Members of the Committee--
My name is Peter R. Steenland and I am pleased to appear before you on behalf of the Department of Justice to testify on S. 2259, the Confederated Tribes of the Colville Reservation Grand Coulee Dam Settlement Act.
Introduction and Summary -- S. 2259 provides for a legislative settlement of Confederated Tribes of the Colville Reservation v. United States, Docket No. 181-D, a lawsuit filed by the Tribes in 1951 before the Indian Claims Commission. We are pleased to state that by working diligently and in good faith, the Tribe, the Bonneville Power Administration (Department of Energy), the Department of the Interior and our Department have been able to fashion a proposed settlement which all think fair and which we can all recommend to you as an appropriate resolution to this dispute. We are very proud of that joint effort.
This case concerns the government's alleged denial of power revenue benefits to the plaintiff Indian Tribes from construction and operation of the Grand Coulee Dam project, which utilized the Tribes, lands and water power rights. The dam was completed in 1942 and has been generating hydroelectric power since that time without any payments to the Tribes. The dam is maintained and operated by the Department of the Interior, Bureau of Reclamation, and the power is marketed by the Bonneville Power Administration of the Department of Energy.
The government's potential liability traces to the "fair and honorable dealings" clause of the Indian Claims Commission Act of August 13, 1946, 60 Stat. 1049, 1050. In a larger sense, that Act waived the government's sovereign immunity for the purpose of allowing the Indian Claims Commission to consider and adjudicate tribal claims of "ancient" wrongs. The Court of Claims (now the United States Court of Federal Claims) inherited the Commission's jurisdiction by virtue of the Act of October 8, 1976, 90 Stat. 1990.
The Indian Claims Commission Act of 1946 provides that any tribal claims for wrongs under its enabling provisions had to be filed within five years of August 13, 1951, or they would be time barred. The time bar has been, in our view, an essential and important component of Act. The Confederated Tribes of the Colville Reservation timely filed this lawsuit in 1951. For this reason, the legislative settlement of this action will not serve as a precedent for the settlement of claims by Indian tribes that failed to file their claims in a timely manner.
The Tribes and the federal government have been actively engaged in settlement negotiations for over a year. These negotiations have resulted in a proposed settlement agreement. The proposed settlement has two components. one is a lump sum award to compensate the Tribes for lost power revenues from 1942 to present, and the other is a future annual revenue sharing plan. The lump sum payment would be made by an agreed judgment in the Court of Federal Claims and paid from the Judgment Fund under 31 U.S.C. 1304. The annual payments would come from revenues derived from power generated at the Grand Coulee Dam starting in 1996.
The federal government is not well postured for a victory on this claim which has been pending for over 40 years. Thus we do not believe that further protracted litigation would serve the interest of justice or those of the American taxpayers.
This lawsuit involves a claim of entitlement by the Confederated Tribes of the Colville Reservation to a share of the power revenues attributable to the Grand Coulee Dam and the Franklin D. Roosevelt Reservoir on the Columbia River in the State of Washington, from the time of its construction and operation. 1 1 This particular Docket, No. 181-D, was stayed pending resolution of other actions within Docket No. 181. In Dockets 181-A and B, which were consolidated, the Indian Claims Commission awarded the Tribes $3.5 million for land claims in 1967. In 1978, the Indian Claims Commission awarded the Tribes $3.257 million in Docket 181-C for the loss of their fisheries as a result of the construction of the Grand Coulee Dam.
1. The Confederated Tribes of the Colville Reservation -- A brief history of the Colville Reservation is helpful here. The reservation was carved out of an extensive region in the Pacific Northwest that included the ancestral lands of a number of Indian bands. Those bands later became members of the Confederated Tribes. The government acquired title to the region which was the aboriginal domain of the Tribes by a Treaty with Great Britain on June 15, 1846. The reservation was later created by the Executive Order of President Grant on July 2, 1872. The boundaries of the 3,000,000 acre reservation were described as being "bounded on the east and south by the Columbia River, on the West by the Okanogan River, and on the North by the British possessions."
The decision to build the Grand Coulee Dam -- This dispute arose when the government decided to construct the Grand Coulee Dam on the Columbia River adjacent to the reservation. From 1927 to 1931, at the direction of Congress, the Corps of Engineers investigated the Columbia River and its tributaries. The Corps' report listed a number of sites, including Grand Coulee, where power could be produced at low cost, and recommended that the development be performed by local governmental authorities or private utilities under the Federal Power Act of 1935. Under Section 10(e) of the Federal Power Act, licensees must pay Indian tribes for the use of reservation lands.
Shortly thereafter, the Columbia Basin Commission, an agency of the State of Washington, applied for, and in August 1933 received a preliminary permit from the Federal Power Commission for the water power development of the Grand Coulee site. When the project was federalized, however, the preliminary permit was cancelled. Instead, the federal government, which is not subject to the Federal Power Act, undertook to build the dam. That action precluded commercialization of water power by the Tribes. The government began building the dam in the mid-1930's. A letter dated December 5, 1933, to the Supervising Engineer regarding the Grand Coulee and the power interests of the Tribes, with the approval signature of Secretary of the Interior Ickes, states:
This report should take into consideration the most valuable purpose to which the Indians, interests could be placed, including the development of hydroelectric power.
We cannot too strongly impress upon you the importance of this matter to the Indians and therefore to request that it be given careful and prompt attention so as to avoid any unnecessary delay.
Also, a letter dated December 5, 1933, to the Commission of the Bureau of Reclamation and endorsed by Interior Secretary Ickes, stated that "it is necessary to secure additional data before we can advise you what would constitute a reasonable revenue to the Indians for the use of their lands within the Grand Coulee power and reservoir site areas." And a letter dated June 4, 1935 from the Commissioner of the Bureau of Reclamation requested that additional data be secured to determine "a reasonable revenue to the Indians for the use of their lands within the power and reservoir site areas."
The Dam, after a series of Acts appropriating funds for the continuation and eventual completion of the project, began to generate hydroelectric power in 1941 and was completed in 1942.
Pursuant to the Act of June 29, 1940, the Secretary of the Interior compensated the Tribes $63,000 for some 3,000 acres of lands taken as a result of the Dam project. However, the compensation made to the Tribes did not include remuneration for power related values taken by the government, and the Tribe is not presently given a share of the ongoing revenues from power generation.
This litigation -- After the enactment of the Indian Claims Commission Act, the Tribes timely filed this action in 1951, contending that the government must pay compensation for the hydroelectric power generated by the flow of the Columbia River over the tribal lands taken in aid of the Grand Coulee Dam. Ultimately, the government filed a motion for partial summary judgment arguing that the Tribes were precluded from recovering any compensation because Congress, in authorizing the Dam, exercised its constitutional powers to promote and aid navigation for the public good. It asserted that this proper exercise of the navigational servitude legally foreclosed any attempt by the Tribes to recover compensation for water power values stemming from the flow of the Columbia River. The government further argued that it had not assumed or breached any trust relationship, special or otherwise, when it took certain tribal lands to build the project.
The Tribes responded with a cross-motion for partial summary judgment arguing that, even if the navigational servitude was properly exercised by the government, the servitude was subordinate to claims initiated under the extra-legal grounds of recovery provided in the "fair and honorable dealings" clause of the Indian Claims Commission Act. The Tribes further argued that notwithstanding any exercise of the navigational servitude, they were entitled to recover power revenue benefits under the Indian Claims Commission Act's fair and honorable dealing clause.
The Claims Court granted the government's motion for summary judgment and dismissed the petition, holding that the navigational servitude was superior to all the Indian legal, equitable, and moral claims presented in this case. On appeal, the Federal Circuit affirmed-in-part and reversed-in-part and remanded for trial, holding that while plaintiff had no legal and equitable claim based on the navigational servitude, they did have a viable moral claim based on the "fair and honorable dealings" provision of the Indian Claims Commission Act of 1946. See Confederated Tribes of Colville Reservation v. U. S., 964 F.2d 1102 (Fed. Cir. 1992).
With the Federal Circuit's ruling that the Tribes, moral claim under the "fair and honorable dealings" provision of the Indian Claims Commission Act survives the defenses raised in government's motion for summary judgment, the historical record will become the focus in the litigation.
While this litigation was underway, in 1975, the Senate Committee on Appropriations directed the Secretaries of the Interior and Army to open discussions with the Tribes to assess a resolution of this dispute. S. Rep. 94-505, p. 79. Pursuant to that directive, a task force, consisting of the Departments of the Interior and Army, and the Bonneville Power Administration, issued a final report in September 1980.
The report was approved by the Secretary of the Interior. It concluded among other things that there was "no question but that the Tribes would be entitled to compensation had the projects been built and operated by the Federal Power Act licensees," and that the Tribes would have received a reasonable benefit as fixed by that Commission pursuant to Section 10(e) of the Federal Power Act. The report further suggested that the legal defenses of the United States be exhausted with respect to the navigational servitude before further action be taken regarding the Tribes, power claims. With the recent Federal Circuit decision in this action, that has, in effect, been done.
In this action, the federal historical record will be tested under the standard set by Aleut Community v. United States, 480 F.2d 831, 839 (Ct.Cl. 1973), for establishing a fair and honorable dealings claims:
There must be a showing 1 that the United States undertook an obligation, a "special relationship," 2 the obligation was to the Tribe, 3 that the United States failed to meet its obligation, and 41 that as a result the Tribe suffered damages.
For its part, the Federal Circuit has already stated that it is undisputed that the Tribes were attempting commercial development of the Columbia River from riparian lands upstream of the Grand Coulee Dam prior to construction and that the government knowingly interfered with and frustrated the endeavors of the Tribes. Moreover, with respect to Tribes' efforts to develop their water power interests, that Court stated that "the United States itself knowingly interfered with and frustrated the endeavors of the Colville Tribes."
The resolution reached in the proposed settlement does not constitute an admission of liability. In fact, we would vigorously contest liability if the Tribes, claim were litigated. But, we are prepared to recognize that the record, in this timely filed claim, can be read to reflect an undertaking by the United States with respect to power values. Because of that we think it is fair and just to fashion a complete resolution of this long-standing claim. We believe that we have crafted such a complete resolution in the proposed settlement.
The Grand Coulee Dam has been generating electric power since 1941. Therefore, for an assessment of past damages in this action, we look at power values for fiscal years 1942 to 1994, a fifty-two year period. Although the project has been generating power since 1941, it has never paid any rental or annual charge for power values to the Tribes. Had the project continued under the original license as a non-federal project subject to Section 10(e) of the Federal Power Act, the Tribes would have received a reasonable annual payment fixed by the Federal Power Commission (which is now the Federal Energy Regulatory Commission).
After extensive negotiations, the Tribes and the government arrived at an agreed $53 million lump sum for back payments since 1942 in settlement of the Tribes, timely claim for lost power revenues in the operation of the Grand Coulee Dam. For settlement of future claims, BPA and the Tribes have agreed to an annual payment of $15.25 million starting in 1996 based on a percentage factor of the annual profits from the Dam's operations.
It is our judgment that settlement is both warranted and feasible. We believe that the settlement agreement signed by the Department of Justice, the Department of the Interior, and the Bonneville Power Administration of the Department of Energy is fair and in the interest of all concerned parties. We therefore recommend that S. 2259 be enacted into law.
That concludes my prepared testimony. At this time, Mr. Chairman, I would be pleased to respond to questions or comments from you or other Committee Members.