WASHINGTON (CN) - With Native American farmers having claimed less than half of a $680 million federal discrimination settlement, a federal judge refused to unseat two class representatives who stand to gain more from settlement revisions.
Native Americans were just one group that complained about racial discrimination in the U.S. Department of Agriculture's Farm Loan Program.
Like black, Latino and female farmers in other class actions, Native Americans led by Marilyn Keepseagle claimed that discriminatory practices denied them the same benefits as white farmers between 1981 and 1999.
All the cases ended in settlement agreements, but more than $380 million remained unclaimed from the $680 million fund in the Keepseagle case.
The terms of the settlement had indicated that any leftover money would be distributed under the cy pres doctrine, which directs unclaimed settlement funds to organizations most likely to benefit class members.
After a year or two of wrangling , counsel for the class and the Department of Agriculture agreed to modify the settlement so that the bulk of the Cy Pres Fund would "create a trust with a twenty-year life span, which would distribute the funds to organizations that are deemed to serve Native American farmers and ranchers."
"The idea being that a longer time horizon for distribution, combined with the creation of an independent and specialized entity for directing the distribution, would more efficiently distribute the funds than the existing cy pres provisions," U.S. District Judge Emmet Sullivan explained Thursday.
With Porter Holder and Claryca Mandan nominated to serve as trustees of that cy pres fund, Keepseagle and her husband moved to remove them and to compel the production of certain materials by class counsel.
Sullivan's latest ruling denies both motions, finding "that class representatives do not become inadequate merely because other class members disagree with their strategic decisions."
If confirmed as cy pres trustees, Holder and Mandan "would be eligible to receive up to $10,000 annually for as long as they served, ... limited to a maximum possible term of ten years," according to the ruling
Though the Keepseagles claimed that this development gives Holder and Mandan an unfair interest in supporting the modification, class counsel noted that the pair would also be financially motivated to join the Keepseagles in seeking supplemental payments for class members.
Sullivan determined that the conflict is not apparent.
In addition to facing court confirmation and expiring term limits, the trustee positions do not promise "money for nothing," according to the ruling.
Sullivan emphasized that they would be tasked with supervising "what would surely be a complex distribution process."
There is also no evidence to show that Holder and Mandan are "self-dealing," or that they are taking something from other members of the class.
"As the court has previously held, the class members in this case have no legal right to the Cy Pres Fund," he wrote. "They agreed to - and did not appeal - a final settlement that entirely extinguished their legal claims, provided a framework for the distribution of damages, and mandated that all excess funds be distributed pursuant to a cy pres remedy. The process for distributing the Cy Pres Fund is the sole target of class counsel's pending motion for modification, so the proposed modification would not implicate a class member's legal right. ... Accordingly, the court does not have the authority to remove class representatives at this stage of proceedings, where a final judgment has been entered and the pending proposal for modification of the agreement does not implicate the legal rights of class members.
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