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The federal government has a long history of cheating American Indians, and not all of this dirty dealing is in the distant past. On Monday, the Supreme Court hears arguments in a suit by the Navajo, who lost millions of dollars’ worth of coal royalties because the government helped a coal company underpay for their coal. A lower court ruled for the Navajo Nation. The Supreme Court should affirm that well-reasoned decision.
The Navajo’s huge reservation spreads across parts of Arizona, New Mexico and Utah. The United States holds the lands in trust and manages their large coal deposits. Peabody Coal had a lease to mine on that land. The terms provided that in 1984, the interior secretary could make a reasonable adjustment in the royalty rates paid to the tribe.
That year the department increased the royalty rate to 20 percent of gross proceeds. After Peabody protested, the Reagan administration’s interior secretary met with a Peabody lobbyist, without informing the Navajo. The secretary then signed a memo blocking the increase and called for the Navajo to negotiate with Peabody. The tribe, already under severe economic pressure, ended up agreeing to a rate of just 12.5 percent. The Navajo eventually sued, arguing that the government violated its duty to look out for their interests, and that it cost them as much as $600 million in royalties.
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