Keepseagle v. Vilsack
| Decision Date | 07 November 2014 |
| Docket Number | Civil Action No. 99-3119 (EGS) |
| Parties | MARILYN KEEPSEAGLE, et al., Plaintiffs, v. TOM VILSACK, Secretary, U.S. Department of Agriculture, Defendant. |
| Court | U.S. District Court — District of Columbia |
Pending before the Court are two motions to intervene in this case. Both groups of putative intervenors seek to participate in proceedings regarding the Court's consideration of a pending motion to modify the cy pres provisions of the 2011 agreement that resulted in the settlement of this class action ("the Agreement"). First, the Choctaw Nation of Oklahoma and its affiliated Jones Academy Foundation ("the Choctaw Movants") seek to intervene on the basis of their concern that the proposed modification will adversely affect their opportunity to receive cy pres funds. Second, a group of class members who successfully obtained compensation under the Agreement (calling themselves "the Great Plains Claimants") seek intervention due to their concern that Class Counsel has failed to request a modification that would provide for additional payments to them.
Both motions raise questions regarding the requirements for intervening in post-judgment proceedings involving cy pres distributions. In this case, the Agreement created a cy pres fund to distribute any leftover funds. That portion of the Agreement was not objected to, and no appeal was filed from the Court's approval of it. So this is not a case where parties seek to intervene to address whether cy pres is appropriate in the first instance. The narrow issue before the Court is modification: Should the cy pres provisions of the Agreement be modified and, if so, how? It is on this issue that the putative intervenors seek to be heard as parties.
The Choctaw Movants desire to maintain the status quo. They oppose the proposed changes to the procedures for distributing cy pres funds. In doing so, they assert that they have a legal right to the cy pres funds, despite being neither members of the class nor otherwise connected to the Agreement. The Choctaw Movants lack standing, however. For one, it is highly speculative that the proposed modification would harm, rather than help, their ability to compete for a portion of the cy pres funds. In any event, the Choctaw Movants lack legal rights under the Agreement, which in no way expressed or implied an intent to benefit them or a class to which they belong.
The Great Plains Claimants desire to propose an entirely different modification. They would remove the cy pres provisionsaltogether and distribute the leftover funds to class members who have already completed the claims process and received monetary awards. The Great Plains Claimants, however, do not have a legally protected interest in those funds. By failing to object to the cy pres provisions or otherwise appeal the approval of the Agreement, and then participating in the claims process, they settled their legal claims. Accordingly, the Court cannot find that they retain a legal interest giving them standing to intervene.
Upon consideration of the motions to intervene, the responses and replies thereto, the applicable law, and the entire record, the Court DENIES the motions.1
Following over a decade of litigation, the parties to this class action reached a Settlement Agreement. See Agreement, ECF No. 621-2.2 The Agreement created a Compensation Fund ("theFund") of $680,000,000 "for the benefit of the Class." Id. ¶ VII.F (p. 7). The Fund was to be used in part to cover the attorney-fee award and individual awards to those who served as class representatives. See id. Primarily, however, the Fund would "pay Final Track A Liquidated Awards, Final Track A Liquidated Tax Awards, Final Track B Awards, and Debt Relief Tax Awards, to, or on behalf of, Class Members pursuant to the Non-Judicial Claims Process." Id.
The Agreement described how leftover funds, if any, would be disbursed: "In the event there is a balance remaining . . . the Claims Administrator shall direct any leftover funds to the Cy Pres Fund." Agreement ¶ IX.F.9 (p. 37). "Class Counsel may then designate Cy Pres Beneficiaries to receive equal shares of the Cy Pres Fund." Id. These designations "shall be for the benefit of Native American farmers and ranchers." Id. The Agreement made eligibility as a recipient contingent upon being "recommend[ed] by Class Counsel and approv[ed] by the Court." Id. Potential recipients were also only "non-profit organization[s], other than a law firm, legal services entity, or educational institution, that has provided agricultural, businessassistance, or advocacy services to Native American farmers between 1981 and [November 1, 2010]." Id. ¶ II.I (pp. 6-7).
The Class received notice of all relevant provisions of the Agreement. The Claim Form provided to potential claimants contained a section that required the claimant to acknowledge that "[y]ou . . . forever and finally release USDA from any and all claims and causes of action that have been or could have been asserted against the Secretary by the proposed Class and the Class Members in the Case arising out of the conduct alleged therein." Ex. C to Agreement, ECF No. 576-1 at 63. The Agreement, moreover, provided that the Class "agrees to the dismissal of the Case with prejudice." Id. ¶ VI.A (p. 15).3 The Claim Form also notified Track A claimants that they would be "eligible for . . . [a] cash award up to $50,000." Ex. C to Agreement, ECF No. 576-1 at 63. The Notice that was sent to the Class similarly described the $50,000 maximum under Track A and the fact that participation would result in a resolution of the individual's legal claim, and stated that "[i]f any moneyremains in the Settlement Fund after all payments to class members and expenses have been paid, then it will be donated to one or more organizations that have provided agricultural, business assistance, or advocacy services to Native Americans." See Ex. I to Agreement, ECF No. 576-1 at 87, 88, 92.
The parties first indicated to the Court that they had reached a settlement on October 19, 2010. See Notice of Settlement, ECF No. 570. On October 22, 2010, they moved for preliminary approval of the Agreement. See Mot. for Preliminary Approval, ECF No. 571. On November 1, 2010, the Court preliminarily approved the Agreement. See Order, ECF No. 577. The Court also approved the parties' proposed notice to the Class, directed that any objections to the Agreement be postmarked by no later than February 28, 2011, and scheduled a fairness hearing for April 28, 2011. See id. at 3.
On March 18, 2011, Class Counsel filed copies of thirty-five letters raising objections to the Agreement. See Notice, ECF No. 585. Class Counsel filed their motion seeking final approval of the Agreement, which also responded to those objections, on April 1, 2011. See Mot. for Final Approval, ECF No. 589. Only two written objections related to cy pres. See id. at 62-63. One objector requested that his organizations be granted cy pres funds. See Kent Objection, ECF No. 585-2 at 7-8. Class Counselnoted that this request was premature. See Mot. for Final Approval, ECF No. 589 at 62. Another objector indicated his preference that excess funds be used for outreach purposes and not be limited to groups that already existed in 1981. See Givens Objection, ECF No. 585-4 at 19-20. Class Counsel noted that this desire was entirely consistent with the existing cy pres provisions. See Mot. for Final Approval, ECF No. 589 at 62-63.
The Court held a fairness hearing on April 28, 2011. See Minute Entry of April 28, 2011. The issue of cy pres was not raised by any objector. See generally Transcript of April 28, 2011 Fairness Hearing, ECF No. 609. After hearing from all who attended the fairness hearing, the Court found that the Agreement was fair and reasonable and approved it pursuant to Federal Rule of Civil Procedure 23(e). See Order, ECF No. 606. No appeal was filed from the Court's approval of the Agreement.
On August 30, 2013 Class Counsel filed a status report, notifying the Court that nearly all distributions from the Fund had been made and approximately $380,000,000 remained leftover. See Status Report, ECF No. 646 at 3. Class Counsel asserted that this "render[ed] some of the conditions for cy pres distribution impractical." Id. at 5. Class Counsel also outlined a potential modification of the Agreement, which would have involved theendowment of a new foundation "which could fund non-profit organizations serving the needs of Native American farmers and ranchers." Id. at 8. The Department of Agriculture opposed this proposal. See Response to Status Report, ECF No. 649.
The filing of the August 30, 2013 status report prompted the Choctaw Movants and the Great Plains Claimants to move to intervene. See Mot. to Intervene, ECF No. 647; Mot. to Intervene, ECF No. 654. These motions, however, sought to intervene in proceedings that did not yet exist. No one had proposed any modification to the Court and the hypothetical proposal outlined by Class Counsel was opposed by the defendant. Accordingly, the Court allowed the parties additional time to come to an agreement on whether and how to modify the Agreement.
On September 24, 2014, Class Counsel filed an unopposed motion to modify the Agreement. See Mot. to Modify, ECF No. 709. The modification proposes that 10% of the Cy Pres Fund be distributed immediately to non-profit organizations "proposed by Class Counsel and approved by the Court" that must also meet the following criteria:
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