St. Labre Indian School and the Roman Catholic Church have been thrust back into district court to defend themselves against allegations of “unjust enrichment” made by the Northern Cheyenne Tribe.

The Montana Supreme Court on Tuesday partially overturned rulings made in 2009 in favor of the school and church, sending the case back to District Judge Susan Watters of Billings for reconsideration.

The tribe sued in 2005, contending that the Catholic school near Ashland exploited the poverty on the Northern Cheyenne in direct-mail fundraising campaigns but did not share the proceeds of the campaigns equitably with the tribe.

Watters had ruled against the tribe, reasoning that the Northern Cheyenne had failed to show that St. Labre had “done something wrong or taken advantage of the tribe in some way.”

In its decision, the Supreme Court found that the tribe did not have to establish that the school had done anything wrong to prove that St. Labre had been unjustly enriched.

The high court also said that contrary to Watters’ decision, the tribe did not have to provide evidence of losses it suffered by the school’s actions.

“Unjust enrichment, as a concept of restitution, simply requires that a party holds property under such circumstances that in equity and good conscience he ought not to retain it,” the court said.

While the school and tribe had no contract regarding distribution of donated funds, the court said the Northern Cheyenne could make their claims through a “constructive trust” argument. Constructive trust can be created if the judge finds that St. Labre had a duty to share with the tribe money that would unjustly enrich the school.

St. Labre has been using direct mail as a fundraising technique since the early 1950s. Appeals to donors featured the plight of the poverty-stricken southeast Montana reservation. The Northern Cheyenne contend that the mailings bring in between $27 million and $30 million a year, and that the school has an endowment of about $90 million.

The school maintains that it provides a free education to Native American children as well as other assistance to the tribe and its members.

The tribe asserts that St. Labre’s contributions have been irregular and insufficient relative to the amount of money it raises promoting its assistance to the Northern Cheyenne.

The Supreme Court also overturned Watters’ ruling that a three-year statute of limitations started claims against the school running in March 2002. The court said that there are still issues for the district judge to decide concerning when the clock started ticking.

The court upheld Watters’ decision that the tribe had failed to prove allegations of breach of contract, negligent misrepresentation, fraud and wrongful conversion.

The court also agreed with Watters’ decision to throw out claims that St. Labre’s actions constituted cultural genocide.

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