Lawyers spent 18 unpaid years fighting for Navajos

This is an archived article that was published on sltrib.com in 2010, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Over nearly 18 years, efforts to hold the state accountable for alleged mismanagement of the Navajo Trust Fund easily could have stalled. But the perseverance of Utah's Navajos and their lawyers -- who haven't earned a penny from the case so far but never lost faith -- kept a federal lawsuit alive through numerous appeals and delays.

"Our clients were frustrated over the years, but there was never a point where they said, 'Let's drop it,' " said attorney Brian Barnard of Salt Lake City. "Our clients were tenacious. Our cause was just."

Everything finally came together with a proposed $33 million settlement last week. Pending official approval, the suit could be over by the summer.

In addition to the Navajos' determination, recent legal rulings and a partial accounting of trust expenditures fueled the way to the resolution. Also key were the efforts of Gov. Gary Herbert, who pushed for a settlement, and William Canby Jr., a federal judge with a knack for crafting compromises.

Herbert spokeswoman Angie Welling said the governor and legislators met with San Juan Navajo leaders several times.

"Governor Herbert felt it was important to reach a resolution in this long-standing case, and he sees the proposed settlement as an equitable way to address the actions that took place so long ago," Welling said.

The suit was filed in July 1992 by Barnard and lawyer John Pace, but the dispute has been simmering for almost half a century.

The Utah Navajo Trust Fund was created by Congress in 1933 to hold 37½ percent of the royalties from drilling in the Aneth oil fields for the benefit of tribal members living in San Juan County through projects such as new housing and health care. The rest of the royalty money goes to Navajo Nation headquarters in Window Rock, Ariz.

After substantial money began flowing into the account in 1955, some beneficiaries in Utah alleged mismanagement by state trustees. Four lawsuits eventually were filed -- the first in 1961 -- demanding an accounting. The first three suits ended with either no accounting or a limited review of some transactions.

In 1990, Navajos in San Juan County organized and put up a candidate for every open seat in the county. One of the poll watchers was Pace, whom tribal members turned to in 1992 when they decided to file suit.

That suit sought an accounting of trust expenditures from the mid-1950s to 1992, when a new board took over management. Five Navajos were the original plaintiffs in Jake Pelt, et al. v. State of Utah .

The litigation produced massive piles of documents as the years went on. The suit was dismissed once, then reinstated by the 10th U.S. Circuit Court of Appeals in Denver. New administrations, which had nothing to do with the alleged mishandling, inherited the legal tangle.

Three of the original plaintiffs died, including Pelt. The suit eventually became a class action and now has eight class representatives, one from each Navajo chapter in Utah and one who represents off-reservation tribal members.

Barnard and Pace traveled to the reservation in southern Utah once or twice a year to update their clients. The wheels of justice moved slowly and sometimes the lawyers had nothing new to report.

"There was a two-year period of time where we did nothing but sweat," Barnard said of the wait for a decision from the 10th Circuit on a major point of contention.

His side won that ruling, as well as others, but the case continued to inch along despite his requests for settlement discussions, Barnard said. Meanwhile, the plaintiffs' lawyers paid court costs out of their own pockets.

Harrison Johnson, who took the place of his late father as one of the Navajo class representatives, described Barnard and Pace as "amazing lawyers." He said some attorneys in the previous three cases dropped out after a while.

"Mister Pace and Mister Barnard, they never back down," Johnson said. "They're working day and night."

Events in the past several years moved the parties into mediation. Then shortly after he took office in the summer, Herbert said he wanted to talk settlement.

Serious negotiations began. The mediator was Canby, a senior judge on the 9th U.S. Circuit Court of Appeals, who came to Salt Lake City from Phoenix for six or seven meetings. Canby did not charge for his time and the state of Utah is reimbursing him up to $20,000 for his travel and out-of-pocket expenses.

Utah Assistant Attorney General David Sonnenreich praised Canby for the "creative solution" he helped formulate.

"The various elements in this case were like a jigsaw puzzle," Sonnenreich said. "We had to put them together all at once to come up with a fair and equitable solution."

The state has denied the mismanagement allegations and admits no wrongdoing.

As with all compromises, both sides gave up a little.

"The question was: Should we continue to litigate it or should we get money into the trust and start using it to help these people?" Barnard said.

In the end, both sides decided to eliminate the uncertainty of what could happen at a trial.

Barnard said the settlement will help all Utahns. Navajo citizens will benefit from projects funded by their oil royalties and the money being spent on the litigation can be used for other state needs, he said.

"Bringing it to an end is a wise thing for everyone," Barnard said.

pmanson@sltrib.com" Target="_BLANK">pmanson@sltrib.com

Editor's note: This version corrects David Sonnenreich's title.