Interior To Court: Rescind Indian Royalty Order

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The government asked a federal appeals court Friday to rescind a district judge's plan requiring the Interior Department (search) to account for billions of dollars in lost royalties American Indians say they are owed.

U.S. District Judge Royce Lamberth (search) ordered the accounting in 2003 as part of a class-action lawsuit in which thousands of American Indians accuse the Interior Department of cheating them out of more than $100 billion by mismanaging oil, gas, grazing, timber and other royalties from their land dating back to 1887. The suit was filed in 1996.

On Friday, lawyers for the government argued that the massive historical accounting would cost $12 billion — exceeding the cost and scope of what Congress has said was acceptable.

They asked the three-judge panel of the U.S. Court of Appeals (search) for the District of Columbia Circuit to allow the Interior Department to continue with its own accounting effort.

"A court cannot properly order expenditure of billions of dollars of taxpayer money in aid of an accounting that Congress never authorized, much less required," lawyers for the government argued in their appeal brief.

The appeal was the latest twist in the nine-year court battle between the American Indians and the Interior Department. The case has gone back and forth between the district and appeals courts as both sides argue over whether the government can truly say how much it owes the American Indians (search).

Earlier this year, the American Indians offered to settle for $27.5 billion, an amount some lawmakers have said is too expensive.

In a sign of the importance of the outcome of the hearing, Interior Secretary Gale Norton attended the morning's hearing.

The Interior Department and Lamberth have struggled often in the years since the lawsuit was filed. Lamberth has held both Norton and her Clinton administration predecessor, Bruce Babbitt, in contempt. The ruling against Norton was later overturned.

After Lamberth excoriated the department in a July order — calling it a "pathetic outpost" left over from a "racist and imperialist" government — the government took the rare step of asking that he be removed from the case. The request was to be heard on Friday, but the appeals court on Thursday assigned the question to a different panel.

In another unusual twist, lawyers for the American Indians on Friday argued that the case should be returned to the district court because the government did not tell the district judge how expensive the accounting would be.

"We believe that when the court is given sufficient information, the court will then direct ... that we not waste billions of dollars," their lawyer, Bill Austin (search), told the panel.

It was unclear Friday when the court would make a decision.