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The United States, of course, may not be sued without its consent. This long-established principle has been applied in actions for the possession or conveyance of real estate. It has been applied to Indian lands the title to which the United States holds in trust. It has been applied, specifically, in a suit by an Indian who has a beneficial interest in land.
The Affiliated Ute Citizens (AUC), an unincorporated association of mixed-blood Indians, brought suit against the United States in the United States District Court for the District of Utah. The purpose of the suit was to obtain (1) pro rata distribution to individual Indians of the mineral estate underlying their reservation, and (2) a determination that AUC, and not the Ute Development Corporation (UDC), was entitled to manage the Indians' mineral rights and unadjudicated claims against the United States. The suit was dismissed for lack of jurisdiction, and the Court of Appeals for the Tenth Circuit affirmed. Certificates for Indians' shares of stock in UDC were deposited in a bank, which acknowledged that it would be acting for the individual stockholders and would be under a duty to see that transfers of the stockholders' shares were properly made. After a federal proclamation terminated federal supervision over the Indians' property, sales of some of the Indians' UDC shares were arranged by employees of the bank. Indians who had sold such shares brought suit against the bank and its employees in the United States District Court for the District of Utah. It was alleged that the bank and the employees had conducted the sales in such a manner as to defraud the sellers, in violation of Securities and Exchange Commission Rule 10b-5. Also, it was alleged that the United States was liable under the Federal Tort Claims Act for violating its duty to prevent the fraudulent sales. The District Court held that the bank and the employees had violated Rule 10b-5; that the United States was also liable, since limited aspects of a federal trust relationship continued beyond the date of the proclamation of termination; and that for purposes of determining the measure of damages, the fair value of the UDC stock at the time of the Indians' sales was $ 1,500 per share. The Court of Appeals for the Tenth Circuit reversed, holding that after the date of the proclamation of termination, the United States had no duty with respect to sales of UDC stock; that the bank and its employees were liable in connection with only a few of the sales; and that the valuation of $ 1,500 per share was not substantiated by the record.
Was the AUC action was properly dismissed for want of jurisdiction as an unconsented suit against the United States?
The Court held that the AUC action was properly dismissed for want of jurisdiction as an unconsented suit against the United States, that UDC, not AUC, was entitled to manage the mineral rights, and that the United States had no duty with respect to the sales of stock occurring after the proclamation of termination; and it was also held, expressing the unanimous views of the court, that the Court of Appeals had erred in holding the bank and its employees liable in connection with only a few sales of stock, and that the District Court's $ 1,500 valuation had sufficient support in the record