The $3.4 billion lawsuit that forced a reckoning with federal trust funds

Science · Published 20 October 2026 Swipe more like this →

In short: For decades, the U.S. government managed trust funds for over 500,000 Native Americans, collecting fees from resource leases while failing to distribute royalties. Elouise Cobell spent her life fighting to expose this mismanagement, eventually securing the largest class-action settlement ever against the federal government.

While serving as the Treasurer of the Blackfeet Tribe for over a decade, Elouise Cobell discovered systemic irregularities in how the U.S. managed funds held in trust for individual Native Americans. These funds were derived from leases on trust lands for lumber, oil, gas, and minerals. Over time, as original trust lands were divided among descendants, the accounts became so complex that many tribal members were not receiving their fair share of royalties. Cobell initially attempted to seek reform through the Intertribal Monitoring Association from the mid-1980s to the mid-1990s before turning to litigation.

In 1996, Cobell filed the landmark class-action suit Cobell v. Salazar. Supported by the Lannan Foundation, which provided over $7 million in grants, the litigation sought to force an accounting of the trust funds. The case culminated in a 2009 settlement approved by the Obama administration. In 2010, Congress appropriated $3.4 billion to settle the claims. The legacy amount split into three categories: payouts for separate claimants, a $1.9 billion pool for purchasing divided land stakes, and a $60 million educational grant for Alaskan Natives and Native Americans.

The settlement's impact was profound. By November 2022, the land buy-back program concluded, having paid $1.69 billion to restore about 3 million acres of land to tribal control. While many individuals received settlements of approximately $1,800, Cobell noted the settlement was significantly less than a full accounting of what was owed. She chose to settle because the class of eligible individuals was shrinking as elders passed away, making the pursuit of a perfect penny-by-penny accounting a race against time.

Cobell was a multifaceted leader who founded the first national bank on an Indian reservation, the Blackfeet National Bank, and received a MacArthur 'Genius' award in 1997 for her work on Native financial literacy. Her life's work was recognized posthumously in 2016 with the Presidential Medal of Freedom.

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