Judge Needn’t Deal With |Settlement Leftovers

     WASHINGTON (CN) – There are no legal grounds for a judge to deal with unclaimed money in a settlement between a Native American class and the government because there has been no appeal, a federal judge ruled.
     The settlement set aside $680 million for Native American farmers and ranchers who applied for loans from the U.S. Department of Agriculture as compensation for the department’s alleged history of discrimination against the group.
     However, five years later, $380 million of the money remains unclaimed, the result of a “monumental” failure of the claims process, Judge Emmet Sullivan wrote for the D.C. district court.
     The deal, which the Agriculture Department and lead plaintiff Marylin Keepseagle struck late in 2010 after more than a decade of litigation, held that any remaining award money would go into a separate fund for class counsel to distribute equally among organizations that give aid to Native American farmers and ranchers subject to court approval, according to the ruling.
     But when class counsel notified the court in 2013 that it intended to use the unexpectedly large amount of leftover money to create an endowment to support “non-profit organizations serving the needs of Native American farmers and ranchers,” a group representing the Choctaw tribe objected and attempted to intervene, the ruling states.
     The district court denied the intervention last year because the group couldn’t show how the new plan would substantially damage it. Class counsel and the government didn’t approve of the provision either, as the system set up in the settlement was not designed with such a large amount of leftover money in mind, according to court documents.
     Instead, they proposed to distribute 10 percent of the remaining funds to class members and use the remaining 90 percent to create a foundation that would distribute the money through a grant system over the course of 20 years, according to the ruling and Keepseagle’s attorney John Dillard.
     Keepseagle and a group the judge calls the Great Plains claimants wanted to distribute the remaining money directly to class members. That would include opening a second claims period as well as giving those who already made a claim additional awards, the ruling states.
     Nobody involved in the case approved of the way the settlement proposed to distribute the leftover money, but the court didn’t have much legal ground to change the deal, Sullivan wrote in last week’s ruling.
     “The court’s role is not to craft a new compromise based upon the court’s own views about the appropriate amount of compensation due to class members who alleged decades-long, and in many cases, life-altering discrimination at the hands of their federal government,” the judge wrote. “Nor is it to create a preferred process for distributing the funds to charity.”
     The problem was the existence of a final settlement, because changing it in this situation would be comparable to altering a final judgment without appeal, Sullivan wrote.
     “Class counsel and the defendant note that the Keepseagles are eliding an important fact that renders this case unique: The question is not which distribution method the court should choose in a vacuum; rather, the court is presented with specific and mandatory language in a final settlement that was never challenged or appealed,” the judge wrote.
     The Keepseagle group did not provide a valid legal reason for the court to change the terms of the settlement agreement, a group of other claimants did not prove the current system creates an unfair distribution of remaining award money, and the government and the class counsel’s proposal did not meet approval requirements, Sullivan ruled.
     But last week’s ruling does not necessarily mean the end for a new plan to distribute the funds. Sullivan expressed hope that the parties could come together and reach an agreement, just like in the original settlement.
     “The parties have the ability to reach a compromise that the court can approve and which would give this case finality,” Sullivan wrote.
     Dillard was similarly hopeful, saying his hope was that the two sides would come together and reach a deal that would satisfy everyone.
     “We agree with the judge that nobody wants the final result,” Dillard said. “So we should look towards doing what’s right in this case so everybody can sit down and work something out.”
     The U.S. Department of Agriculture did not respond to requests for comment.

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