No~

FILED

0 8 8 O i NOV I

OFFICE OF THE CLERK

In theSupreme Court of the United States

MARTIN MARCEAU; CANDICE LAMOTT; JULIE RATTLER;JOSEPH RATTLER, JR.; JOHN G. EDWARDS; MARY J.GRANT; GRAY GRANT; DEANA MOUNTAIN CHIEF, onbehalf of themselves and others similarly situated,

Petitioner,

Vo

BLACKFEET HOUSING AUTHORITY, and its boardmembers; SANDRA CALFBOSSRIBS;NEVA RUNNINGWOLF; KELLY EDWARDS; URSULASPOTTED BEAR;MELVIN MARTINEZ, Secretary; DEPARTMENT OFHOUSING AND URBAN DEVELOPMENT, United States ofAmerica,

Respondent.

On Petition For A Writ of Certiorari To TheUnited States Court Of Appeals For the Ninth

Circuit

PETITION FOR A WRIT OF CERTIORARI

Thomas E. ToweCounsel of RecordFor PetitionerPO Box 30457Billings, MT 59107(406) 248-7337

Jeffrey SimkovicCounsel of Recordfor PetitionerPO Box 1077Billings, MT 59103(406) 248-7000

Blank Page

QUESTIONS PRESENTED

Whether the statutes, regulations and HUDrequirements were so pervasive that federal controlover Indian housing construction created a trustresponsibility towards Indians which the Complaintalleges was violated in this case. See United States v.

Mitchell, 463 U.S. 206, 218-224 (1983); United States v.White Mountain Apache Tribe, 537 U.S. 465, 468-477

(2003).

ii.

PARTIES

The Petitioners are Martin Marceau; CandiceLamott; Julie Rattler; Joseph Rattler, Jr.; John G.Edwards; Mary J. Grant; Gray Grant; Deana MountainChief who are purchasers and residents of IndianHousing built and paid for by Defendants.

Respondents Blackfeet Housing Authority, andits board members; Sandra Calfbossribs; Neva RunningWolf; Kelly Edwards, Ursula Spotted Bear, MelvinMartinez, Secretary; Department of Housing andUrban Development, United States of America areresponsible for the funding, construction andmaintenance of the houses in question.

III.

TABLE OF CONTENTS

QUESTIONS PRESENTED ..........................................i

iiPARTIES ......................................................................

iiiTABLE OF CONTENTS .............................................

TABLE OF AUTHORITIES .........................................vi

PETITION FOR WRIT OF CERTIORARI ...................

OPINIONS BELOW ......................................................

2JURISDICTION ............................................................

STATUTORY PROVISIONS INVOLVED ...................2

STATEMENT OF FACTS .............................................2

PROCEDURAL BACKGROUND .................................6

REASONS FOR GRANTING THE PETITION ...........8

I. There is a Conflict in the Circuits. ThisCase from the Ninth Circuit is DramaticallyOpposed to a Decision of the FederalCircuit in Navajo Nation v. United States,501 F.3d 13279 ...............................................8, 9

iv,

TABLE OF CONTENTS CONTINUED

II. The Majori~;y of the Ninth Circuit PanelMisconstrues and Misunderstands ThisCourt’s Test for Federal Trust Responsibility toIndians as Expressed In Mitchell H andWhite Mountain Apache ................................... 13

III. A Combination of the Federal Government’sCommitmer.~t to Indians in Housing, theCongressional Acts on Housing, and theSevere Disaclvantage the Indian AllotmentAct Causes Indians Seeking to Own TheirOwn Home Places an Enormous Burden onThe United States. This Burden FurtherSupports the Application of Federal TrustResponsibili’~y to the Facts of this Case ...........22

Ao History of the Obligation of theUnited States for Indian Housing ........22

B. Facts of the Case ...................................28

Co The Congressional Mandate toProvide Safe, Sanity and DecentHousing to All Americans ......................32

The Control Exercised by HUD onIndian Housing is Plenary ...................35

Because Indian Land is Held inTrust, Indian People Are at a GreatDisad~antage in Housing .....................40

Vo

TABLE OF CONTENTS CONTINUED.

APPENDIX

Martin Marceau; Candice Lamott; Julie Rattler, JosephRattler, Jr.; John G. Edwards; Mary J. Grant; Gary

Grant; Deana Mountain Chief, on behalf of themselvesand others similarly situated, Plaintiffs-Appellants v.Blackfeet Housing Authority, and its board members;Sandra Calfbossribs; Neva Running Wolf," KellyEdwards; Ursula Spotted Bear; Melvin Martinez,Secretary; Department of Housing and UrbanDevelopment, United States of America, Defendants-Appellees, United States Court of Appeals for the NinthCircuit, No. 04-35210, CV-02-00073-SEH, Order andAmended Opinion filed August 22, 2008........................................................................... App. 1-45

Martin Marceau; Candice Lamott; Julie Rattler, JosephRattler, Jr.; John G. Edwards; Mary J. Grant; GaryGrant; Deana Mountain Chief, on behalf of themselvesand others similarly situated, Plaintiffs-Appellants v.Blackfeet Housing Authority, and its board members;Sandra Calflgossribs; Neva Running Wolf," KellyEdwards; Ursula Spotted Bear; Melvin Martinez,Secretary; Department of Housing and UrbanDevelopment, United States of America, Defendants-Appellees, United States Court of Appeals for the NinthCircuit, No. 04-35210, CV-02-00073-SEH, Order andAmended Opinion filed March19, 2008......................................................................... App. 46-91

vi.

TABLE OF CONTENTS CONTINUED

APPENDIX

Martin Marceau; Candice Lamott; Julie Rattler, JosephRattler, Jr.; John G. Edwards; Mary J. Grant; GaryGrant; Deana Mountain Chief, on behalf of themselvesand others similarly situated, Plaintiffs-Appellants v.Blackfeet Housing! Authority, and its board members;Sandra Calfbossribs; Neva Running Wolf," KellyEdwards; Ursula Spotted Bear; Melvin Martinez,Secretary; Department of Housing and UrbanDevelopment, United States of America, Defendants-Appellees, United States Court of Appeals for the NinthCircuit, No. 04-35210, CV-02-00073-SEH, Order andAmended Opinion filed July 21, 2006....................................................................... App. 92-121

Martin Marceau, Candice Lamott, Julie Rattler, JosephRattler, Jr., John G. Edwards, Jr., Mary J. Grant,Gary Grant and Deana Mountain Chief, on behalf ofthemselves and oti~ers similarly situated, Plaintiffs v.Blackfeet Housing and its board members SandraCalfbossribs, Neva Running Wolf, Kelly Edwards, andUrsula Spotted Bear, & Mel Martinez, Secretary,Department of Housing and Urban Development,United States of America, Defendants, In the UnitedStates District Court for the District of Montana, GreatFails Division, No. CV-02-73-GF-SEH,Memorandum and Order filed April 3, 2003..................................................................... App. 122-136

vii.

TABI.E OF CONTENTS CONTINUED_

Martin Marceau, Candice Lamott, Julie Rattler, JosephRattler, Jr., John G. Edwards, Jr., Mary J. Grant,Gary Grant and Deana Mountain Chief, on behalf ofthemselves and others similarly Situated, Plaintiffs v.Blackfeet Housing and its board members SandraCalfbossribs, Neva Running Wolf, Kelly Edwards, and.Ursula Spotted Bear, & Mel Martinez, Secretary,Department of Housing and Urban Development,United States of America, Defendants, In the UnitedStates District Court for the District of Montana, GreatFalls Division, No. CV-02-73-GF-SEHAmended Class Action Complaint, filed April 3, 2003

...................................... App. 137-167

viii.

TABLE OF AUTHORITIES

CASES

Bowen v. Massachusetts, 4897 U.S. 879,895 (1988) ......................................................................8

Brown v. United States, 86 F.3d 1554, 1560-61(Fed Cir. 1996) ........................................... 12, 17, 19, 20

Commonwealth of Pennsylvaniav. Lynn, 501 F.2d 848, 855 (C.A.D.C. 1974) ...............33

Dewakuku v. Cuomo, (Dewakuku I)107 F. Supp. 2d 1117, 1121-24 (2000) ............25, 34, 35

Dewakuku III, 226 F. Supp. 2d 11991201-04, 1206, (D..Ariz. 2002) ........................25, 34, 37

Donovan v. Mazzola, 716 F.2d, 1226, 1239 (9th Cir.1983) cert. den. 1984, 104 S. Ct. 704 ..........................19

Dudnikov v. Chalk and VermilionFine Hearts, Inc. 51.4 F.3d 1063, 1070(10t~ Cir. 2008) .............................................................29

Kottmyer v. Maas, 4:36 F.3d 684, 688 (6t~ cir 2006) ... 29

Kurowski v. Burch, 290 N.E.2d401,406 (Ill. App. Ct. 1972) ........................................18

iX.

TABLE OF AUTHORITIES CONTINUED

Matter of Kuehn, 308 N.W.2d 398399 (S.D. 1981) ............................................................

18

Marceau v. Blackfeet Hous. Auth(Marceau 1), 455 F.3d 974 (9th Cir. 2006) ......... 6, 23, 32

Marceau v. Blackfeet Hous. Auth.(Marceau II), 519 F.3d 838 (9t~ Cir. 2008) ................ 6, 7

Marceau v. Blackfeet Hous. Auth.(Marceau III), 540 F.3d 916 (9th Cir. 2008 .................... 7

Navajo Nation v. United States, . .........................12, 16

501 F.3d 1327, ...............................................................9

501 F.3d 1327, 1343-46 (2007) ..............................17, 21

Rehearing and Rehearing En Banc denied 2008,cert. granted October 1, 2008, 129 Sup. Ct. 30, ........10

76 U.S.L.W. 3621 .......................................................21

Navajo Nation v. United States (Navajo III)508, N. 12, 123 S. Ct. 1079 .........................................10

Pawnee v. United States, 830 F.2d 187(Fed. Cir. 1987) ............................................................21

Short v. United States, 719 F.2d 1133 (Fed. Cir. 1983),cert. denied, 467 U.S. 1256 (1984) ..............................

21

Standard Insurance Company v.Saklad, 127 F.3d 1179, 1181(9th Cir. 1997 ................................................................19

Xo

TABLE OF AUTHORITIES CONTINUED

United States v. Mitchell, (Mitchell I) .............10, 16, 23

Uni~d Sta~s v. Mi~hel~ (Mitchell I I)463U.S. 206,218-226 103 S. Ct. 2961(1983) .................

..................... 7,9,11,13,17,18,19,20,21,43209,222,103 S. Ct. 2961 ............................................14219,220,103 S. Ct. 2961 ............................................14

Uni~d Sta~s v. NavajoNation, 537 U.S.488(2003)i29 S. Ct. 30,76 U.S.L.W. 3621(No. 07-1410) .........12

United States v. WhiteMountainApacheTrib~537 U.S. 465,468-477(2003) ........................................7537 U.S. at 473-74 .......................................................15537 U.S. 465,474-76 (2003) ........................ 9,13,15,18

White Mountain Apache Tribe v. Bracker448 U.S. 136, 145, 147, 100 S. Ct. 2578,65 L.Ed. 2na 665 (19’80) ................................................14

White Mountain Apache Tribe ofArizona, v. United States, 26 C1. Ct.446-67 (1992) ...............................................................23

STATUTES

12 U.S.C. §§1715(a) .......................................................212 U.S.C. §1738(a) .........................................................2

24 C.F.R. §805.102 (1979) .............................................524 C.F.R. §805.109(c) ............................................3

TABLE OF CONTENTS CONTINUED.

24 C.F.R. §805-206 ........................................................5

24 C.F.R. 8805.406 ........................................................5

24 C.F.R. §805.408 ........................................................5

24 C.F.R. §805.416(a)(1)(ii) ...........................................5

24 C.F.R.24 C.F.R.24 C.F.R.24 C.F.R.24 C.F.R.24 C.F.R.24 C.F.R.24 C.F.R.24 C.F.R.

§805.418(a) ....................................................5

§905.108(a), 905.109 (1990) ........................36

§905.215(a) (1991) .......................................38

§905.230 (1991) ...........................................38

8905.250 (1991) ...........................................38

8905.255(a)(2) (1991) ..................................3826§1003.5 ........................................................

81905.109 ....................................................36

§2000.200 ....................................................34

25 C.F.R. §905.270 ......................................................34

25 U.S.C. §331 .............................................................273525 U.S.C. § 4101 Chap. 576 .......................................

Indian Reorganization Act48 Stat. 984, Chap. 576 ...............................................23

25 U.S.C. §4131(a((1) ..................................................34

25 U.S.C. §1702-1750 ....................................................2

28 U.S.C. §1254(1) .........................................................2

30 C.F.R. Part 206, subpart F ....................................11

38 U.S.C. 83761-3764 ..................................................26

42 U.S.C. 81437(a) .......................................................33

42 U.S.C. §1437(a)(4) ..................................................33

42 U.S.C. §1437(b)(3) ..................................................33

xii.

TABLE OF .AUTHORITIES CONTINUED

42 U.S.C. §1437aa.-1437ee ............................................542 U.S.C. §1437aa..ff ................................................2, 3442 U.S.C. §1437bb(c)(B) ..............................................3942 U.S.C. §1437-1440 .......42 U.S.C. §1437-1444 ..................................................2442 U.S.C. §1471-1490s ................................................2642 U.SoC. §5302(17) .....................................................26

OTHER AUTHORITIES

135 Congressional Record,$7608 (Daily Ed. June 10, 1988) ................................26

142 Congressional RecordH. 11603, 11613 (Daily Edition,September 28, 1996) ....................................................25

Accord Restatement. 3d Trusts 1, (IntroductoryNote)

Blackfeet Housing Authority, C.F.R.§805.109(c) (1977) ..........................................................2

Blackfeet Tribal Ordinance No. 7, art. II§§1-2 (Jan. 4, 1977) reprinted in 24 C.F.R.§805 subpt. A, app. I (1977) ..........................................3

Bogert, Law of Trusts 5, §1 (1973) .............................18

oooXIII.

TABLE OF AUTHORITIES CONTINUED

Congressional Report 1987,H. R. Rep. #100-604 (1988), reprintedin 1988 U.S.C.C.A.M. 791, 795 ...................................26

Emergency Relief AppropriationsAct (48 Stat. on 15, Chap. 48 ......................................24

F. Cohen Handbook of FederalIndian Law ..................................................................321387-88, §22.05(1) (2005 Ed.) ..................22, 23, 24, 251389 ........................................................................27, 281389-1390 ....................................................................351389.90 §220511] . .................................................. ......281397-98 §2205 [3] [a] .....................................................261398-99, §22.05[4] ............................................~ ..........261399, §22.05[5] ............................................................26

General Allotment Act of 1887"Dawes Act", 24 Stat. 388 ...........................................27

Indian Housing Act of 1988102 Stat. 676 (1988) ................................................5, 34

Indian Housing Handbook, H.R. Rep. No.100-604 (1988) reprinted in 1988 U.S.C.C.A.N. 791, 793 ..........................................5, 6, 25, 43

Indian Housing Task Force on IndianAffairs, July 10, 1961) .................................................24

TABLE OF AUTHORITIES CONTINUED

Institute for Gov’t Research, theProblem of Indian Administration553-561 (1982) ..............................................................23

Jessie McQuillan Rotten Deal,Missoula Indep., April 6, 2006 ....................................32

Mark K. Almer, the Legal Originof Indian Housing Authorities andthe HUD Indian Housing Programs13 Am. Indian L. Rev. 109-110-11 (1988) ..................24

Native American Housing Assistanceand Self-Determination Act of 1996(NAHASDA),ll0 Stat. 4018 (1996) ....................2, 5, 26PL 104-330, 110 Star. 4016 (1996) ....................5,26, 34

Restatement (First) of Trusts §240 ............................18

Staff of Senate Committee on Interior andIsular Report on Indian Housing Efforts in the UnitedStates, Selected Appendences 3(Comm. Print 1975) ..................................................... 24

The Indian Housing Act of 1988 .............................2, 34

The National Housing Act ............................................2

The Treaty with Blackfeet, October17, 1885 (11 Stat. 657) ................................................23

XVo

TABLE OF AUTHORITIES CONTINUED

United States Housing Act of 1937,42 U.S.C. §§1437-1440PL 75-412, 50 Stat. 888 (1937) .........................4, 24, 33

United States Housing Act of 1937And 1949, 42 U.S.C. §1437-1437x ............................2, 5

U.S. Commission on Civil Rights,A Quiet Crisis: Federal Funding andUnmet Needs in Indian County51, 53, 63 (2003) ..........................................................27

U.S. General Accounting Office,Native American Housing; HomeOwnership Opportunities on TrustLands, GAO-RCED-98-49, 6-7 (1998) ...................27, 28

Virginia Davis, a Discovery of Sorts:Reexamining the Origins of the FederalIndian Housing Obligation, 18Harvard Blackletter L. J. 211, 221-225 (2002) ....22, 23

PETITION FOR WRIT OF CERTIORARI

Petitioner respectfully requests this Court issuea Writ of certiorari 1;o review the opinion of the NinthCircuit Court of Appeals entered on August 22, 2008.

OPINION BELOW

The Ninth Circuit Court of Appeals filed itsOrder and Amended Opinion August 22, 2008, andselected this decision for publication. See 540 F.3d916 (9th Cir.2008). ]:t had previously filed an Orderand Amended Opinion on March 19, 2008, publishedat 519 F.3d 838 (9th Cir. 2008) after rehearing beforea three-judge panel on May 9, 2007. The initial Orderand Opinion of July 21, 2006, published at 455 F.3d974 (9th Cir. 2006) was replaced in part and adoptedin part. The Amended Opinion of March 19, 2008appearing at 519 F.3d 838 (9th Cir. 2008) was replacedin its entirety.

e

JURISDICTION

The Ninth Circuit filed its decision on August22, 2008, and entered an order denyingDefendants’/Respondents’ motions for rehearing andfor rehearing en banc on August 22, 2008. This Courthas jurisdiction under 28 U.S.C. §1254(1) to reviewthe circuit court’s decision on a writ of certiorari.

STATUTORY PROVISIONS INVOLVED

1. United States Housing Act of1949, 42 USC §1437-1437x.

2. The National Housing Act

o

o

1937 and

12 U.S.C

§§17151(a) and 1738(a).The Indian Housing Act of 1988 42 U.S.C.§1437aa-ff.The Native American Housing and Self-Determination Act of 1996 (NAHASDA) 25U.S.C. §§1702-1750.

STATEMENT OF FACTS

Petitioners adopt the Ninth Circuit’sStatement of Facts as follows:

"The Blackfeet Tribe is a federally recognizedIndian tribe. In January 1977, the Tribe establisheda separate entity, the Blackfeet

("Housing Authority"). See C.F.R. §805.109(c) (1977)(requiring, as a prerequisite to receiving block grantfrom the United States Department of Housing andUrban Development ("HUD"), that a tribe form aHUD-approved tribal housing authority). TheBlackfeet Tribe adopted HUD’s model enablingordinance. Blackfeet Tribal Ordinance No. 7, art. II,§§1-2 (Jan. 4, 1977), reprinted in 24 C.F.R. §805,subpt. A, app. I (1977). Thereafter, HUD granted theBlackfeet Housing Authority authorization andfunding to build 153 houses on the BlackfeetReservation.

"Construction of those houses, and someadditional ones, began after the Housing Authoritycame into being in 1977. Construction was completedby 1980. The houses-at least in retrospect-were notwell constructed. They had wooden foundations, andthe wood products used in the foundations werepressure-treated with toxic chemicals. The crux ofPlaintiffs complaint is that HUD directed the use ofpressure-treated wooden foundations, over theobjection of tribal members, and that the HousingAuthority acceded to that directive.

"In the ensuing years, the foundations becamevulnerable to the accumulation of moisture, includingboth groundwater and septic flooding, and tostructural instability. Some of the houses havebecome uninhabitable due to contamination fromtoxic mold and dried sewage residues.

4

The residents of the houses have experiencedhealth problems, including frequent nosebleeds,hoarseness, headaches, malaise, asthma, kidneyfailure, arid cancer.

"Plaintiffs bought or leased the houses, eitherdirectly or indirectly, from the Housing Authority.After it became clear that the houses were unsafe oruninhabitable, Plaintiffs asked the Housing Authorityand HUD to repair the existing houses, provide themwith new houses, or pay them enough money to repairthe houses or acquire substitute housing. When theyreceived no help from either entity, Plaintiffs filedthis class action .... " 540 F.3d at 919-920, App. 7-8.

Judge Pregerson, in dissent,significant additional fact:

adds this

Plaintiffs allege, as the crux of their claimthat HUD required the use of woodfoundations over the objections of Tribalmembers, and that the Housing Authorityacceded to that directive.

540 F.3d at 930, App. 27.

Judge Pregerson also outlines theownership program that is critical to an under-standing of this case as follows:

home

"Pursuant to the goals set out in the UnitedStates Housing Act of 1937, 42 U.S.C. §§1437-1440,HUD developed the Homeownership Program. HUDdesigned the Horaeownership Program to meet thehousing needs of low-income American Indianfamilies. HUD entered into agreements called ’AnnualContributions Contracts’ with tribal housingauthorities under which HUD agreed to provide aspecified amount of money to fund projectsundertaken by the housing authority and pre-approved by HUD. See 24 C.F.Ro §805.102 (1979); id.§805.206. After securing funding from HUD, a tribalhousing authority would then contract with eligibleAmerican Indian families. See id. §805.406. Theprogram required families to contribute land, labor, ormaterials to the building of their house, see id.§805.408, and after occupying the house, each familymade monthly payments in an amount calibrated totheir income, see id. §805.416(a)(1)(ii). The home-buyers were responsible for maintenance of the house.See id. §805.418(a).

"Until 1988, when the program was formalizedin the Indian Housing Act of 1988, 42 U.S.C.§§1437aa-1437ee (1988), repealed by Native AmericanHousing Assistance and Self-Determination Act of1996, Pub. L. No. 104-330, 110 Stat. 4016 (1996),HUD operated the Homeownership Program under aseries of regulations and its "Indian HousingHandbook." See H.R. Rep. No. 100-604 (1988),

reprinted in 1988 U.S.C.C.A.N. 791, 793.." 540 F.3dat 930, App. 26.

PROCEDURAL BACKGROUND

Plaintiffs filed a class action against theHousing Authority, the board members of theHousing Authority, HUD, and the Secretary of HUD.Plaintiffs seek declaratory and injunctive relief anddamages for alleged violations of statutory,contractual and fiduciary duties.

HUD filed a motion to dismiss for lack ofsubject matter jurisdiction and a motion to dismiss forfailure to state a claim upon which relief can begranted. The Housing Authority and its boardmembers filed a motion to dismiss because of tribalimmunity. The district court granted those motions.540 F.3d at 919-20, App. 8.

Plaintiffs appealed to the Ninth Circuit Courtof Appeals. In its initial opinion Ninth Circuitaffirmed the dismissal of HUD and its Secretary, butreversed with respect to the Housing Authority.Marceau v. Blackfeet Hous. Auth. (Marceau I), 455F.3d 974 (9th Cir. 2006)(App.92-121). The NinthCircuit then granted the Housing Authority’s petitionfor rehearing and issued an amended opinionaffirming its reversal with respect to the HousingAuthority but further reversing the district court’sdismissal of the Administrative Procedures Act countagainst HUD. Marceau v. Blackfeet Hous. Auth.

7

(Marceau II), 519 F.3d 838 (9th Cir. 2008)(App. 75-121). The Housing .Authority and HUD filed separatepetitions for panel rehearing and review en banc. TheNinth Circuit then issued its second amended opinionthat is the subject of this petition. Marceau v.Blackfeet Hous. Auth. (Marceau III), 540 F.3rd 916(9th Cir. 2008) (App. 1-45).

In Marceau HI, The Ninth Circuit remandedthe case against the Housing Authority to the districtcourt with instructions to stay, rather than dismiss,the action against the Housing Authority whilePlaintiffs exhaust their tribal court remedies.540 F.3d at 921, App. 9-10.

Second, over a strong dissent of presidingJudge Pregerson, the Ninth Circuit refused to reversethe district court’s dismissal of Plaintiffs’ claim thatthe federal government breached its trustresponsibility to Indians. The majority of the panelheld that the laws, regulations and handbookrequirements failed to establish that the federalgovernment exercised direct control over Indianhouses or money. 540 F.3rd 927-28, App. 21-22. Bycontrast, Judge Pregerson stated that HUD’s controlof housing on tribal land and the HomeownershipProgram was so pervasive that the Tribe and itsmembers had little control over how HUD housingwould be built and no power to control the materialsused. The pervasive regulation of housing on theBlackfeet reservation was exactly like Mitchell H andWhite Mountain Apache. Thus, Judge Pregerson

8

would hold that the government breached itsfiduciary duty by requiring the tribes to usesubstandard, hazardous building materials andrefusing to repair or rebuild the homes. 540 F.3rd 940,

App. 44-45.

As to the Administrative Procedure Act claimthat HUD should be ordered to "fix it," the NinthCircuit unanimously held that the claim was notbarred even if it did require money to fix it becausethe request for an injunction was not a claim formoney damages. See Bowen v. Massachusetts, 4897

U.S. 879, 895 (1988). Thus, this count was remandedto the district court to determine whether HUD failedto comply with its own regulations and whetherarsenic-treated lumber was within industry standardsat the time. 540 F.3rd 928-29, App. 23-25.

Finally, the Ninth Circuit reaffirmed its earlier

determination that the district court lackedjurisdiction to hear the breach of contract claimsagainst HUD. 540 F.3rd 929, App. 25.

This Petition addresses only the second issue,namely, whether the federal government violated itstrust responsibility to Indians.

REASONS FOR GRANTING THE PETITION:

There is a Conflict in the Circuits.This Case from the Ninth Circuit Is

Diametrically Opposed to a Decisionof the Federal Circuit in NavajoNation v. United States~ 501 F.3d1327.

The majority opinion from the Ninth Circuitpanel below rejected the notion of federal trustresponsibility upon the grounds and for the reasonsthat the statute and regulations regarding Indianhousing were not, in and of themselves, sufficient toshow the necessary control for Indian trustresponsibility under United States v. Mitchell, 463 U.S.206, 224-26 (1983) ("Mitchell II") and United States v.White Mountain Apache Tribe, 537 U.S. 465, 474-76(2003) ("White Mountain Apache").

The majority stated, over a strong dissent frompresiding Judge Pregerson, that the test for federaltrust responsibility for Indians cannot depend uponwhat people do in implementing or administering thestatutes and regulations. Whether or not the statutesand regulations are administered by people actingarbitrary, capriciously, or unwisely does not matter.The statutes and regulations themselves must be sopervasive that there is federal control or supervision tomeet the test.

Although we must take as true Plaintiffs’allegations that HUD in fact required theuse of wooden foundations and that thatthose foundations caused injury, thegovernment did not enter into a trustrelationship merely because HUD did not

10

approve an alternative design. AlthoughHUD’s power to approve a design impliesthe power to reject a design as well, thesupreme court made clear in Mitchell 1and Navajo Nation that such oversightauthority alone (whether exercised wiselyor unwisely) cannot create the legalrelationship that is a threshold require-ment for plaintiffs to recover on a trusttheory. Even if HUD’s actions inmandating certain construction materialsand methods may have been arbitrary orcapricious, those actions alone cannot alterthe legal relationship between the parties.

540 F.3d at 927-28, App. 21-22.

By contrast, the Federal Circuit has held exactlythe opposite. Navajo Nation v. United States, 501 F.3d1327, 1335-36 (2007) (Rehearing and Rehearing EnBanc denied 2008), cert. granted October 1, 2008, 129

S. Ct. 30, 76 U.S.L.W. 3621. In that case, the statuteand imple-menting regulations at the time the casearose did not contain the necessary language. Yet theFederal Circuit Panel had no difficulty finding that

"the government exerted actual and significantcontrol" over the coal leasing and royalty rate inquestion.

While it is true that the regulation wasadopted "after the events at issue" NavajoIII, 537 U.S. at 508, N. 12, 123 S. Ct.

ll

1079, .the government does not disputethat the asserted sections of 30 C.F.R.Part 206 subpart F describe actualpractices that existed at the time of thelease amendments and that suchpractices are within the Department ofthe Interior’s authority. Where thegovernment exercises actual controlwithin its authority, neither Congress northe agency ~.eeds to codify such actualcontrol for a fiduciary trust relationshipthat is enforceable by money damages toarise.

501 F.3d at 1342.

The Federal Circuit then quotes from MitchellII:

[W]here the Federal Government takeson or has control or supervision overtribal monies or properties, the fiduciaryrelationship normally exists with respectto such monies or properties (unlessCongress has provided otherwise)° Id;Mitchell II, 463 U.S. at 225.

In the instant case the majority of the NinthCircuit Panel refuses to apply the Indian trustresponsibility notwithstanding the overwhelming

12

factual support for the pervasive control andsupervision exercised by the federal government. Bycontrast, the Federal Circuit, on very similar facts andcircumstances, does applythe Indian trust

responsibility to the Navajo Nation case. Judge

Pregerson acknowledges thaton their face, thestatutes in the instant case only establish amechanismfor lending money to tribal housingauthorities. However, when the entire statutory

framework including the regulations and theHandbook rules are considered, along with the actualimplementation by the regulators are added to theequation, the following conclusion results: "Federalcontrol over the funds and the program is pervasive."540 F.3d at 940, App. 44 (Pregerson dissenting). JudgePregerson is exactly correct and is exactly en sync withthe Federal Circuit decision in Navajo Nation, supra.

This Court granted certiorari in the NavajoNation case on October 1, 2008. United States v.Navajo Nation, i29 S. Ct. 30, 76 U.S.L.W. 3621 (No.07-1410). The clarification provided by this Court inthat case should also apply to the instant case. ThePetition for certiorari should be granted in this case sothe cases can be handled together. See also, Brown v.United States, 86 F.3d 1554, 1560 (Fed. Cir. 1996).

13

II.

The Majority of the Ninth CircuitPanel Misconstrues and Mis-understands This Court’s Test forFederal Trust Responsibility toIndians as Expressed in Mitchell Hand White Mountain Apache.

This Court has established a special remedy forbreach of the federal trust responsibility owed by thegovernment to Indians. It is outlined in Mitchell II,"463 U.S. at 224-26, and White Mountain Apache, 537U.S. at 474-76. As summarized in White MountainApache, Mitchell H found a pervasive role in thegovernment’s sale of timber from Indian landssufficient to trigger the trust responsibility.

White

The subsequent case of Mitchell Harose on a claim that did look beyond theAllotment Act, and we found that statutesand regulations specifically addressing themanagement of timber on allotted landsraised the fair implication that thesubstantive obligations imposed on theUnited States by these statutes andregulations were enforceable by dam-ages.Mountain Apache, 537 U.S. at 473-74.

14

The issue is whether or not the government hasa "pervasive" role which defines the contours of theUnited States’ fiduciary responsibilities beyond thebare or minimum level.

The Department of the Interior pos-sessed "comprehensive control over theharvesting of Indian timber" and"exercise[d] literally daily supervision over[its] harvesting and management" MitchellH supra, at 209, 222, 103 S. Ct. 296(quoting White Mountain Apache Tribe v.Bracker, 448 US 136, 145, 147, 100 S. Ct.2578, 65 L.Ed.2nd 665 (1980))(internalquotation marks omitted), giving it a"pervasive" role in the sale of timber fromIndian lands under regulations addressing"virtually every aspect of forestmanagement," Mitchell H supra, at 219,

220, 103 S. Ct. 2961. As the statutes andregulations gave the United States "fullresponsibility to manage Indian resourcesand land for the benefit of the Indians" weheld that they "define[d] .... contours of theUnited States’ fiduciary responsibilities"beyond the "bare" or minimal level, andthus could "fairly be interpreted asmandating compensation" through moneydamages if the government faltered in itsresponsibility. 463 US, at 224-226, 103 S.Ct. 2961.

15

White Mountain Apache, 573 U.S. at 474.

White Mountain Apache then added the furtherclarification that the United States’ fiduciaryresponsibilities included a situation in which theUnited States occupied the property in question.When it does so, there is a fair inference that anobligation exists to preserve the propertyimprovements and the United States may not allow itto fall into ruin on its watch. 537 U.S. at 475.

The two Judges of the Ninth Circuit writing themajority opinion below totally misconstrue thislanguage and these holdings to require that thestatutes and regulations in and of themselves to createthe pervasive role that constitutes the bare orminimum level of federal involvement. They failed toconsider how these statutes and regulations areadministered. They failed to take into considerationthe manner in which the statutes and regulations arecarried out.

Any law or rule can be either passive and notoppressive or overwhelming and totally pervasivedepending on how it is administered. The majorityopinion below takes the erroneous position that thestatutes and reglalations themselves must bepervasive. The majority opinion below takes theerroneous position that whether or not the people whoadminister them have acted arbitrarily or capriciouslyunder these statutes and regulations is irrelevant

15

and immaterial. As they so erroneously stated:

Although we must take as true Plaintiffs’allegations that HUD in fact required theuse of wooden foundations and that thatthose foundations caused injury, thegovernment did not enter into a trustrelationship merely because HUD did not

approve an alternative design. AlthoughHUD’s power to approve a design impliesthe power to reject a design as well, thesupreme court made clear in Mitchell Iand Navajo Nation that such oversightauthority alone (whether exercised wiselyor unwisely) cannot create the legalrelationship that is a threshold require-ment for plaintiffs to recover on a trusttheory. Even if HUD’s actions inmandating certain construction materialsand methods may have been arbitrary orcapricious, those actions alone cannot alterthe legal relationship between the parties.

540 F.3d at 927-28, App. 21-22.

First, such a proposition is wrong ethically,morally, logically and legally. To separate theadministration of a statute or regulation from the textand to suggest that a poor, unwise, and over-zealousinterpretation of the statute does not count indetermining the existence of a fiduciary duty is

17

ethically and morally unacceptable. To the Indianvictims, who have suffered wrongs at the hands of theUnited States for many years, it is the same, whetherthe regulations required the wrong or the personsadministering the regulations caused the wrong.Further, it is illogical. We cannot hide our heads inthe sand. The result is the same whether anacceptable regulation is administered by an over-zealous administrator or an unacceptable regulation isadministered by a prudent regulator. The bottom lineis pervasive control. The bottom line is the samecontrol over "virtually every aspect of’ housing thatexceeds the bare or minimum level of control.

Finally, the proposition is wrong legally. Theelaborate control over forest and property belonging toIndians found in Mitchell H did not make any suchdistinction. Control is control whether a corruptadministrator is involved or not. See Navajo Nation v.United States, 501 F..3d 1327, 1343 (Fed. Cir. 2007)cert. granted, October 1, 2008, 129 Sup. Ct. 30, 76 U.S.L. W. 3621; Brown v. United States, 86 F.3d 1554,1560 (Fed. Cir. 1996).

For the United States government to absolveitself of responsibility by suggesting that the laws andrules were okay but it’s just those administrators whocaused your losses and your suffering is wrong. It iscontrary to the best notions of fairness and justice thatbrought about the federal trust responsibility in thefirst place. This issue begs for further consideration bythis Court.

18

Second, this proposition is inconsistent withfundamental trust law. It is, after all, trust law towhich we must look. Mitchell H refers to thenecessary elements of a common law trust. 463 UoS.at 225. "Elementary trust law" is what we must look

to in the final analysis. White Mountain Apache, 537U.S. at 475.

The whole concept of trust arose as anequitable remedy in courts of equity. The EnglishCourt of Chancery developed this notion. The Courtsof Chancery administered the rules and appliedprinciples of equity. While the there is no longer adivision between courts of law and courts of equity,the trustee’s obligation is still an equitable one.

"The trustee’s obligation is said to beequitable." Originally it was recognizedonly by the English Court of Chancery,which alone administered the rules andapplied the principles of equity ....[T]he

trustee’s obligation [is] equitable.Bogert, Law of Trusts 5, §1 (1973). AccordRestatement 3d Trusts 1, (Introductory Note.)

The requirement to do equity is not uncommonas it relates to trusts. See Matter of Kuehn, 308N.W.2d 398, 399 (S.D. 1981); Kurowski v. Burch, 290N.E.2d 401, 406 (Ill. App. Ct. 1972); see gener’allyRestatement (First) of Trusts §240. Indeed, even theNinth Circuit has recognized the importance of

19

equitable remedies in applying traditional trustremedies. Standard Insurance Company v. Saklad,127 F.3d 1179, 1181 (9t~ Cir. 1997); Donovan v.Mazzola, 716 F.2d, ].226, 1239 (9th Cir. 1983) cert.den. 1984, 104 S. Ct. 704.

It is certainly not equitable to the beneficiary todeny relief because the trustee’s agents (governmentagents) have not acted wisely or acted arbitrarily andcapriciously. The impact to the beneficiary (thePlaintiff Indians) is the same whether the action wasdirected by an abusive regulation or the action wasdirected by an agent abusing his authority under avalid regulation. It is totally inequitable to denyrelief because of such a distinction. For the Majorityof the Ninth Circuit Panel to hang their hat on thisdistinction is contrary to trust law principles.

Finally, cases out of the Federal Circuit indicatethe Ninth Circuit is just plain wrong. Thus, in Brownv. United States, 86 F.3d 1554, 1560-61 (Fed. Cir.1996), the question was whether the Indian Long TermLeasing Act and action taken under it placed afiduciary responsibility in the government sufficient togrant jurisdiction for recovery of damages for proof ofbreach of a specific duty imposed by the regulations.The Federal Circuit cites Mitchell II as setting forththe proper test:

[W]here the Federal Government takes onor has control or supervision over tribalmonies or properties the federal relation-

20

ship normally exists with respect to suchmonies or properties.

Mitchell H, 463 U.S. at 225, quoted withapproval in Brown, 86 F.3d at 1560. The Courtin Brown then concluded the above statementwas in the disjunctive - either control orsupervision and not both is required.

Furthermore, there are no limiting or clarifyingadjectives on either the word "control" or theword "supervision." From this the FederalCircuit concluded.

The proper test of whether thegovernment has assumed fiduciary dutiesin the commercial leasing of allottedlands is thus whether, under §415(a)and/or part 162, the Secretary, ratherthan the allottees, has control orsupervision over the leasing programs.All that remains, at this stage of the case,is to apply the test to the statute andregulations at issue.

86 F.3d at 1561.

Clearly there is no room for differentiatingwhether the control is strictly or solely from theregulations or whether the control is a combination ofthe regulatory mandate plus the way it is admin-

21

istered. Accord, Short v. United States, 719 F.2d 1133(Fed. Cir. 1983) cert. denied, 467 U.S. 1256 (1984);Pawnee v. United States, 830 F.2d 187 (Fed. Cir. 1987).Similarly, in Navajo Nation v. United States, 501 F.3d,1327, 1343 (Fed. Cir. 2007) Rehearing and RehearingEn Banc denied 2008, cert. granted October 1, 2008,129 Sup. Ct. 30, 76 U.S.L.W. 3621, the Court statesthat "neither Congress nor the Agency needs to codifysuch actual control ibr a fiduciary trust relationshipthat is enforceable by money damages to arise." 501F.3d at 1343. Without stating whether or not thecontrol comes from the regulations or the individualwho administer the regulations, the Federal Circuitmakes it clear the attachment of a fiduciary trustrelationship depends upon the final results. CitingMitchell H the Court states:

[W]here the Federal Government takes onor has control or supervision over tribalmonies or properties the fiduciaryrelationship normally exists ...

Indeed the Ninth Circuit majority opinionstrays from this test set forth by this Court inMitchell II. It is followed in the Federal Circuit.This Court needs to clarify the ruling and make itclear that federal control or supervision is the keyand it doesn’t matter how that control or supervisionis supported or justified.

22

III.

A Combination of the FederalGovernment’s Commitment to Indiansin Housing, the Congressional Acts onHousing, and the Severe Disadvan-tage the Indian Allotment Act CausesIndians Seeking to Own Their OwnHome Places an Enormous Burden onthe United States. This BurdenFurther Supports the Application ofFederal Trust Responsibility to theFacts of this Case.

A. History of the Obligation of theUnited States for Indian Housing.

The United States made its first pledges toprovide housing assistance to Indian people in theRemoval Treaties of the 1820’s and 1830’s. In thoseTreaties, it agreed to compensate tribes and helpthem establish new homes to replace the ones theyleft behind. (F. Cohen, Handbook of FederalIndianLaw, 1387, §22.05(1) (2005 ed.)("Cohen") Promisescontinued in the Treaties of the 1850’s and 1860’sparticularly when it started focusing on theassimilation desires to encourage Indians to live inpermanent houses and engage in agriculture and toinculcate an "American idea" of private property. Id.at 1387-88. See also, Virginia Davis, a Discovery ofSorts: Reexamining the Origins of the Federal Indian

Housing Obligation, 18 Harvard Blackletter L. J.211,221-225, (2002).1

In 1928, serious deficiencies in the attempt toprovide Indian Houmng and its serious affect on thehealth and well-being of Indian peoples was revealedin the Meriam Report. The Report showed that mostIndian homes were more crowded and in poorercondition than homes in either urban tenements orrural communities in this country.

Worse, houses built by the Federal Governmentoften only exasperated the problems since they hadless ventilation than traditional homes and were lesswell-suited to Indian needs. Inst. for Gov’t Research,the Problem of Indim~ Administration 553-561 (1928)(Lewis Meriam, Teclzaical Director) (Johnson ReprintCorp. 1971); Cohen at 1387-88. Some efforts weremade to address the problem in the 1934 IndianReorganization Act (25 U.S.C §461 et seq. 48 stat. 984,

~ There does not appear to be a direct reference to housing in thetreaties with the Blackfeet Indians. See the treaty withBlackfeet, October 17, 1885 (11 Star. 657), which provides for anannual sum of money to be expended for useful goods andprovision and other articles as the President may determine(Article IX) and another sum of money annually for instructingIndians in agriculture and mechanical pursuits and othereducational endeavors (Ar~,icle X). Article X specifically requiresthat the annual fund be used "in any other respect promotingtheir civilization." The Court of Claims has held that treatylanguage such as the requisites to "promote civilization" includesa covenant to provide housing. White Mountain Apache Tribe ofArizona v. United States, 26 C1. Ct. 446-67 (1992). SeePregerson in Marceau I, specially concurring, App. 119.

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Chap. 576) which established a revolving loan fundthat tribes could use to build housing and improveIndian land. Cohen at 1388. A short-lived IndianRelief and Rehabilitation Program was created underthe Emergency Relief Appropriations Act (48 Stat. On15, Chap. 48) to provide housing in Indian country in1936. Cohen at 1388. No real assistance, however,was provided to Indians until 1961 after a devastatingreport on the state of Indian Housing by a Task Forceon Indian Affairs to the Secretary of the Interior (July10, 1961). As a result, the Public Housing Admin-istration initiated programs to permit Indian HousingAuthorities to participate under the United StatesHousing Act of 1937. The United States Housing Actof 1937 was enacted to help all Americans find decent,safe and sanity living conditions. PL 75-412, 50 Star.888 (1937), current version at 42 U.S.C. §1437-1444.In order to benefit, a local housing authority had to becreated and it was generally considered that tribes hadno authority to do so. See, Staff of Senate Committeeon Interior and Insular Affairs, 94th Cong. First Sess.,Staff Report on Indian Housing Effort in the UnitedStates with Selected Appendences 3 (Comm. Print1975); see also Mark K. Almer, the Legal Origin ofIndian Housing Authorities and the HUD IndianHousing Programs, 13 Am. Indian L. Rev. 109-110-11(1988).

As Cohen states there then developed aproliferation of programs providing housing assistanceto Indian people and tribes culminating with the 1988Indian Housing Act which created a separate office of

25

Native American programs within the Department ofHousing and Urban Development. Cohen at 1388-89.Even this effort, however, was not effective and itssuccess was admittedly "limited." Remarks ofCongressman Lazio, 142 Congressional Record H.11603, 11613 (Daily .edition, September 28, 1996). Seealso, an Excellent History of Congress’ efforts to assistIndian housing in Dewakuku v. Cuomo, 107 F. Supp.2d 1117, 1121-24 (2000) ("Dewakuku I"). The finalcase in this series is Dewakuku III, 226 F. Supp. 2d1199 (D. Ariz. 2002).

The Mutual Help and Homeownership Program("MHHO Program") was developed to assist lowincome Indian families in purchasing their own homesadministered through regulations promulgated byHUD and the "Indian Housing Handbook". However,because Indian lands are held in trust by thegovernment and alternative financing is not available,a total funding was required through HUD. See adescription of this program in Dewakuku I at 1122.Even this program proved ineffective to remedy theIndian housing crisis. As the District Court states inDewakuku I:

I4o

The housing needs of Native Americansin Indian country were radically differentfrom the needs of low income Americansin urban areas.

25

In 1987, according to a congressional report,23.3% of the Native Americans, as compared to 6.4% ofthe total American population, continued to live insubstandard housing. "H. R. Rep. #100-604 (1988),reprinted in 1988 U.S.C.C.A.M. 791, 795. On somereservations, the percentage rose as high as 75%.Remarks of Senator Cranston, 135 CongressionalRecord, $7608 (Daily Ed. June 10, 1988).

Then in 1996, Congress consolidated many ofthe HUD’s programs under the Native AmericanHousing Assistance and Self-Determination Act("NAHASDA"), 110 Star. 4018 (1996), 25 U.S.C. §4101et seq. The Bureau of Indian Affairs developed its ownhousing improvement program under the authority ofthe Snyder Act, 42 U.S.C. §5302 (17); 24 C.F.R.§1003.5. Cohen at 1397-98, §220513][a]. In addition,the Department of Agriculture’s Rural Housing ServiceProgram was designed to meet the needs of Indiancommunities. 42 U.S.C. §1471-1490s; Cohen at 1398-99, §22.05[4]. Finally, the Department of VeteransAffairs also designed a program that allows a portionof their Housing Loan Guarantee Program to benefitIndians. 38 U.S.C. §3761-3764. However, because ofthe enormous difficulty of operating the program ontrust lands where the Indian does not own fee title tothe land, it has met with limited success. Cohen at1399, §22.05[5].

Notwithstanding all of these efforts on the partof Congress and the federal government to assist inIndian housing, housing in Indian country remains far

27

below the national standard. According to the U. S.Commission on Civil Rights, 40% of on reservationhousing was inadequate, a figure six times thenational average in 2003. Over 30% of reservationhouseholds were crowded, 18% severely so and all ofthis leads to ill-health and family abuse. Twentypercent of the reser-vation homes lacked completeplumbing. Less than half were connected to a publicsewer system and 32% lacked telephone service.

As a rule, only about half as many Indian peopleas other Americans own their own homes. U.S.Commission on Civil Rights, A Quiet Crisis: FederalFunding and Unmet Needs in Indian Country 51, 53,63 (2003); Cohen at 1389. Clearly one of the mosttelling reasons for this difficulty and poor result is theGeneral Allotment Act of 1887 ("Dawes Act") 24 Stat.388, 25 U.S.C. §331 et seq. which specifically providesthat beneficial title for lands allotted to tribes and toindividual Indians is vested in the United States astrustee for the Indian beneficiaries. See, presidingJudge Pregerson, dissenting in opinion below, App. 29,37. As Cohen states:

Difficulties foreclosing on real property ontrust land discourage conventional lendersfrom making home finance loans onreservations.

Cohen at 1389. See also U.S. General AccountingOffice, Native American Housing; Home Ownership

28

Opportunities on Trust Lands are limited, GAO-RCED-98-49, at 6-7 (1998).

Obviously, when the entire basis for safe,sanity and decent housing in the United States isbased on homeownership with federally guaranteedloans, this system doesn’t work in Indian countrywhere the individual Indians do not own their ownland and cannot own their own land because of theIndian Allotment Act of 1887.

Cohen cites another factor contributing in theinadequacy of Indian housing.

Federal housing often failed to complywith basic minimum standards, and mightbe uninhabitable almost as soon as it wasbuilt.

Cohen at 1389, 90 §2205 [1]. This is exactly what isinvolved in the instant case.

Cohen also cites lack of basic infrastructuresuch as roads, sewage, water and electrical systemsand the failure to take into account the culturalstandards of the various Indian tribes. He concludesby stating "these problems are exasperated bypersistent under-funding of Indian housing program."Id.

B. Facts of this Case.

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The District Court granted Defendants’ Motionto Dismiss for lack of jurisdiction under Rule 12(b).When a 12(b) Motion to Dismiss is made, whether forlack of jurisdiction or failure to state a claim for relief,the Court must take; as true, all well-pied facts allegedin the Complaint and construe the Complaint liberallyin favor of the Plaintiff. Dudnikov v. Chalk andVermilion Fine Hearts, Inc., 514 F.3d 1063, 1070 (10th

Cir. 2008); Kottmyer v. Maas, 436 F.3d 684, 688 (6th

Cir. 2006). This point is acknowledged in the 9th

Circuit Opinion below. App. 21.

The Amended Complaint in the instant casealleges, in part, as fc,llows:

17. The construction of these houseswas under the close supervision,mandate and direction of HUD.In this regard, the BlackfeetHousing Authority became the armor instrumentality of HUD toaccomplish the goals and purposesof HUD.

18. In order to save money or for otherreasons unknown to representativeplaintiffs and class members, HUDdirected, that all 153 homes in thefirst phase of construction be con-structed urging chemically-treatedwooden foundations even thoughsuch foundations were not standard

19.

20.

30

in the industry at the time, were inviolation of state and local buildingcodes, are now in violation oftheir own regulations, and eventhough HUD knew, or should haveknown, that such constructionmaterials could eventually producecontamination and could eventuallylead to uninhabitability of these 153homes.

The Defendant BlackfeetHousing acknowledged the man-dates and directions of HUD andsubmitted thereto and proceed toconstruct the houses usingchemically-treated wooden founda-tions and other defective productsand designs, even though they alsoknew such foundations weresubstandard in violation of stateand local building codes and wouldeventually produce contaminationthat could lead to uninhabitability.

Because of the use of woodenfoundations and because of otherdesign and construction defects, thehouses were unable to providecontinuous moisture control. Thisfailure caused wide-spread mold

21.

22.

31

development and septic contami-nation.

The latent defects of the chemicallytreated wooden foundation andother defective designs have becomeknown to representative plaintiffsand or:her class members recently.In particular, pathogenic mold,septic-sewage contamination andother toxic and dangeroussubstances have developed. Thesemolds, septic-sewage contaminationand other toxic substances havecaused various health and medicalconditions and have exasperatedother health and medical conditionin representative plaintiffs andother class members including theirspouses and children and otherdependents living in their homes.

In addition, many of the housescontained extensive septic - sewagecontamination resulting fromrepeated ground water and septicflooding. Children who have beenrequired to sleep in rooms withmold and septic-sewage contamina-tion have developed healthcomplications that have preventedthem fi:om playing sports and that

32

resulted in frequent nose bleeding,asthma, hoarseness, headaches andmalaise, kidney failure, and cancer.Elderly and other class membershave developed similar healthcomplications from exposure tothese contaminations.

23. Because of the pathogenic mold,septic-sewage contamination andother toxic substances, the houseshave become unsafe for humanhabitation and representativeplaintiffs and other class membershave been damaged.

Amended Complaint, App. 137-138.

Presiding Judge Pregerson, in Marceau I, states:"for a more vivid description of Plaintiffs’ plight, seeJessie McQuillan Rotten Deal, Missoula Indep., April6, 2006, available at:http://www.Missoulanews.comJnews/newsasp?no=5625" App. 97, note. 1.

Clearly, this is another confirmation of whatCohen refers to as failing to comply with basicminimum standards making the houses uninhabitable.

The Congressional Mandate toProvide Safe, Sanity and DecentHousing to All Americans.

Starting with the United States Housing Act of1937, it is clear that Congress gave the Administrationthe mandate to provide safe, sanitary and descenthousing for every American family, including Indians.The purpose was clearly stated in the Declaration ofpolicy:

It is the policy of the United States ... topromote the general welfare of the nationby imploying the funds and credit of theNation, as provided in this act (A) to assiststates and political subdivision of states toremedy the unsafe housing condition andthe acute shortage of decent and safedwellings for ]:ow-income families ....

42 U.S.C. §1437(a). See also, 42 U.S.C. §1437(a)(4)(thegoal of providing de.cent and affordable housing), andthe nondiscrimination clause in 42 U.S.C. §1437(b)(3),

At least one District Court has stated that thisdirection is a mandate and not a precatory desire.Commonwealth of .Pennsylvania v. Lynn, 501 F.2d848, 855 (C.A.D.C. 1974).

A separate program called Mutual HelpOwnership Opportunity Program was developedunder the Housing Act of 1937, which was intended toassist the Indians to obtain homeownership. Aspreviously indicated, however, this did not work verywell because Indian Lands are held in Trust by thegovernment and alternative financing is just not

available. Duwakuku I at 1122. The home ownershipprogram was then codified in the Indian Housing Actof 1988 which, for the first time established aseparate office of Native American programs withinthe Department of Housing and Urban Development.102 Stat. 676 (1988); 42 U.S.C. §§1437aa-ff.

Indian Housing Act of 1988 was not verysuccessful and was, in turn, repealed in 1996 by theNative American Housing Assistance and Self-Determination Act of 1996, P1. 104-330, 110 Stat.4016 (1996), 25 U.S.C. §4101 et seq. ("NAHSDA").The regulations are found at 24 C.F.R. §2000.200 etseq. The primary objective of NAHASDA is "to assistand promote affordable housing activities to develop,maintain, and operate affordable housing in safe andhealthy environments on Indian reservations and inother Indian areas for occupancy by low incomeIndian families .... " 25 U.S.C. §4131(a)(1).

Among other things, under this Act, HUD hasthe duty to repair the houses that are under itssupervision. 25 C.F.R. §905.270. See Dewakuku IIIat 1203-04. In NAHASDA, Congress reinforced itstrust obligation to Indian people stating thatCongress, through treaties, statutes and historicalrelations " . . . has a unique trust responsibility toprotect and support Indian tribes and Indian people."That trust is discharged, in part, by "providingaffordable homes in safe and healthy environments."25 U.S.C. §4101. As it relates to this case, it issignificant that the houses were constructed in 1979

before both the Indian Housing Act of 1988 orNAHASDA were adopted. Nevertheless, the referencein NAHASDA to the trust responsibility is anacknowledgement of the existence of a previouslyexisting trust responsibility with regard to IndianHousing. See 25 U.S.C. §4101.

D. The Control Exercised by HUD onIndian Housing is Plenary.

The Amended Complaint alleges that theBlackfeet Housing Authority became the arm orinstrumentality of HUD to accomplish HUD’s goalsand purposes. App. at 51-52. Further, the AmendedComplaint alleges that Blackfeet Housing submittedto the mandates and directions of HUD, including theuse of wooden foundations even though they knewsuch foundations were substandard, in violation ofstate and local building codes and even though theyknew such foundations would eventually producecontamination that could lead to uninhabitability. Id.These allegations are not made in a vacuum. Inaddition to Cohen’s comment that federal housing"often failed to comply with basis minimumstandards, and might be uninhabitable almost as soonas it was built" (.Cohen at 1389-90) the same thing isalso found in the case law. Thus, in Dewakuku I, theDistrict Court in Arizona stated:

Although technically an exercise of tribalsovereignty, the Indian Housing Authorityis, in reality, a creature of HUD. HUD’s

regulations "permit" a tribal governmentto create an Indian Housing Authority.See 24 C.F.R. §§905.108(a), 905.109(1990). In every instance where a tribalgovernment creates a housing authority, itmust follow the exact format prescribed byHUD. See 24 C.F.R. §1905.109.Furthermore, HUD will not enter into acontract with an Indian HousingAuthority unless the tribal ordinancecreating the Housing Authority issubmitted to and approved by it. See id.Moreover, the ordinance must besubmitted with evidence that the tribalgovernment’s enactment was eitherapproved by the Secretary of the Interioror that the Secretary of the Interior hasreviewed the ordinance and does not objectto it. See id. The model tribal ordinance,first conceived by HUD in 1962, sets outthe functions of the Indian HousingAuthority and lifts its primary purpose asthe eradication of unsafe and unsanitaryhousing conditions on the reservation.

Dewakuku I, 107 F. Supp. 2d at 1121-22.

The same thing is also related in Dewakuku III.The Dewakuku case is quite similar to the instantcase. Dewakuku purchased a home through theMutual Help Program authorized by the IndianHousing Act. She alleges the home was in such poorcondition and so poorly constructed that it had a

37

malfunctioning electrical system, cracking walls andfloors, leaky roof, popping nails, and is both unsafeand overly expensive to heat in the winter. DewakukuIII, 226 F. Supp. 2nd at 1201. After several wins at theDistrict Court and one set back in the D.C. Circuit, thecase disappears indicating that the matter wasobviously settled or otherwise a satisfactory resolutionwas obtained. In Dewakuku III, the Federal DistrictCourt specifically held that HUD violated theAdministrative Procedures Act by failing to supervisethe Hopi Housing Authority and provide the tribalmember with a decent, safe and sanitary home. Id. at1206. The Secretary was ordered to cure the defects inthe design and construction of Dewakuku’s home. Id.In reaching that conclusion, the Federal District Courtstated that:

Id. at

IT]he duty to build standard housing wasabsolute under the Indian Housing Act.It was only the method of doing so thatwas committed to agency discretion. Allparties concede that this duty was not metin the case of Dewakuku’s home.1202.

In that case, as in the instant case, HUDinsisted that the responsibility for Dewakuku’s homeultimately rested with the local Housing Authority.The Court answered that contention as follows:

While at first glance this argumentmakes sense, a more probing analysisleads the court to reject it. HUD’ssupervisory powers over tribal authoritieswhen implementing the mutual helpprogram are substantial; indeed, they canbe properly termed as near total control.Nothing could have been done on thisproject without HUD’s explicit approval.

Tribal housing authorities have neverbeen seen as wholly independent entitiesunder the Mutual Help Program in therealm of home construction. To insurethat the proposed low income housing metapplicable standards, Congress, when itpassed the Indian Housing Act,anticipated that HUD would provide therequisite technical and supervisoryassistance. More concretely, anyanalysis ofthe Indian Housing Actsimplementingregulations makes clearthat HUD maintains oversight overvirtually everything the Hopi HousingAuthority did regarding the constructionof housing under the mutual helpprogram-from cite selection 24 C.F.R.§905.230 (1991) and production method 24C.F.R. §905.215(a) (1991), to the design 24C.F.R. §905.250 (1991) and developmentbudget 24 C.F.R. §905.255(a)(2)(1991) ....

39

In some, assuming the Hopi HousingAuthority’s plan met all applicablestandards, construction on a home likeDewakuku’s could never have begunwithout HUD’s prior approval. Thesestandards included the use of "structurallysound" building materials and "cost-effective energy" 42 U.S.C. §1437bb(c)(B).... HUD’s oversight capacities did not stopthere. HUD had a substantial role inoverseeing post construction inspectionand certification.

226 F. Supp. 2d 1202-03.

Further, the Court stated:

The Hopi Housing Authority is not, inany sense, it; own agency or a nonprofitorganization with access to contributions,nor is it a private, for profit corporationwith capital sufficient to cure the defectsin Dewakuku’s home. It was createdsolely to administer the public housingmonies received from HUD for Hopi lands.It is an offshoot of HUD HUD’sadministrator of public housingconstruction on Hopi reservations andnothing more.

40

Id. at 1204. The Court concluded that by askingDewakuku to sue the Housing Authority, HUD isessentially asking Dewakuku to sue an empty shell inorder to avoid direct liability itself. Id.

This is precisely the Plaintiffs’ contention in theinstant case. Suit against the Blackfeet HousingAuthority is an empty remedy. HUD made all thedecisions. HUD required substandard construction byinsisting on wooden foundations where woodenfoundations were simply inappropriate. HUD shouldnot be allowed to avoid its responsibility. To do so isone more strike in the breach of responsibilities of theUnited States to its Indian citizens.

Eo Because Indian Land is Held inTrust, Indian People Are at aGreat Disadvantage in Housing.

Presiding Judge Pregerson put his fingerdirectly on the main problem of this case. Indianhousing is substandard because of Congress. It isCongress’s decision to hold tribal land in trust therebymaking it practically impossible to obtain homefinancing like all other citizens.

As Judge Pregerson so eloquently stated:

Congress’s decision to hold tribal land intrust has the practical result ofeliminating the private housing market ontribal land because neither individual

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members of the tribe nor the tribe itselfhas an ownership interest that can beused as security. The government’sdecision to hold tribal land in trust showsCongress’ intent to maintain pervasivecontrol over the resource at stake andgives rise to a fiduciary duty in thegovernment-created tribal housingmarket.

540 F.3d at 936, App. 37.

Judge Pregerson then refers to the adverseconsequences of tl~Le government decision to taketribal land in trust.

[B]y holding tribal land in trust andpreventing alienation, the federal gov-ernment foreclosed many options thatexist in most private housing markets.

Id. Tribal land simply cannot be used as collateral.

Not only does this single factor contribute morethan anything to the pervasive control that thegovernment exercises over Indian housing but JudgePregerson makes a persuasive point that theregulations and statutory scheme itself is alsopervasive.

On their fhce, these statutes onlyestablish a mechanism for lending

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money to tribal housing authorities.However, a review of the statutoryframework and the homeownershipprogram reveals a much more pervasiveand controlling framework, as detailedabove. The homeownership programdetails the requirements for the housingand connected contracts. There is nolanguage indicating that the goal of thehomeownership program is merely to helpIndian tribes in managing their land andresources. The regulations do not defer totribal authorities or tribal decisionmaking, but instead explicitly detail whatthe tribal authorities are to do each stepof the way. Federal control over thefunds and the program is pervasive.

540 F3d at 940, App. 44. (Emphasis supplied.)

It is respectfully submitted the majorityopinion on this point is very weak. Indeed, it isillogical to think that in a trust situation one can onlyconsider the cold statutes and regulations withoutlooking at how they are implemented in fact. JudgePregerson, on the other hand, is exactly right and hasprecedent to support him.

The Indian Housing Authorities are nothingbut a straw person established by the United StatesDepartment of Housing and Urban Development

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The statutes and regulation, particularly whenconsidered with the Indian Housing Handbook, andwhen considered as actually implemented in theinstant case leaves no question but that the federalcontrol and supervision over Indian housing ispervasive. It is respectfully submitted the federalcontrol over Indian housing is even more pervasivethan the federal control over Indian timber lands inMitchell H. The case begs for further consideration bythis Court.

DATED this 17th day of November, 2008.

Respectfully submitted,

Thomas E. ToweTowe, Ball, Enright, MackeySommerfeld, PLLP2525 Sixth Avenue NorthPO Box 30457:Billings, MT 59107-0457406-248-7337Counsel of Record forPetitioner

Jeffrey SimkovicSimkovic Law FirmPO Box 1077Billings, MT 59103-0177406-248-7000Counsel of Record forPetitioner