Nez Perce Tribe of Indians v. United States

Pursuant to an 1894 treaty between the Nez Perce Tribe of Indians (tribe) (plaintiff) and the United States (defendant), the tribe ceded 549,559 acres of its western reservation to the federal government, which paid $2.97 per acre for the land. One million dollars of the purchase price was placed in a trust that drew 5 percent interest. The government quickly resold the land to settlers for between $3.75 and $5 per acre. Seventy years later, the tribe charged the government with having paid an unconscionably low price for the ceded land and filed suit with the Indian Claims Commission (commission) to recover the discrepancy between the $2.97-per-acre purchase price and the land’s 1894 fair market value, which the tribe contended was $12 per acre. Two experts appraised the land based on an array of factors, including: (1) the premium price the tribe received for ceding land in bulk, offset by the depressing price impact of reselling the land within so short a time frame; (2) the government’s cost of subdividing and selling the land; (3) the land’s suitability for varied uses; (4) the land’s proximity to transportation and towns, offset by its distance from eastern population centers; (5) comparable contemporary land sales; and (6) the impact of the 1894 nationwide economic depression. One expert estimated the land’s 1894 value at $11.89 per acre, and the other expert estimated it at $1.29 per acre. Based on this testimony and its own calculations, the commission concluded that the land was worth $4 per acre but that the disparity between that figure and the $2.97-per-acre purchase price was not so unconscionable as to warrant compensatory relief. The tribe appealed to the federal Court of Claims.