Thursday, December 10, 2009

Federal Government Settles 13 Years-Long Class Action Lawsuit Filed by American Indians

        The National Law Journal reports that the Cobell Litigation started 13 years ago (on June 10, 1996) has settled.  The lead plaintiff, Elouise Cobell, initiated the class action lawsuit to force the federal government to account for what she (and others) argued were billions of mismanaged dollars supposedly held in trust for American Indians.  The trust funds were initially set up under the controversial Dawes Act of 1887 (also known, as the General Allotment Act), a law dating back more than 100 hundred years.  Historically, the Act was responsible for substantial land loss by American Indians.  More than two-thirds of the land held in 1887 by American Indians was transferred to whites during the 47-year history of the Act.  The Act was designed to de-emphasize communal ownership of land and to assimilate American Indians into individual land ownership.  The Act, in relevant part, required that the federal government hold lands alloted to individual American Indians in trust (unless, the American Indian was deemed competent to self-manage the land) and to account for funds generated by the lease of those lands for grazing and the extraction of oil, mineral and timber.  Under the paternalistic law (its amendments and successor legislation), the federal government is to act as a fiduciary for the benefit of hundreds of thousands of American Indians. This summer the U.S. Court of Appeals for the District of Columbia Circuit vacated a trial court decision entered in the U.S. District Court for the District of Columbia by Judge James Robertson that held that it was "impossible" to account for these funds, awarding the arbitrary sum of $455 million to the plaintiffs.  The plaintiffs were suing for billions. 

        U.S. Attorney General Eric Holder, standing with Interior Secretary Kenneth Salazar, remarked before reporters at the Department of the Interior on Tuesday, December 8, that, "settlement talks [had] failed repeatedly over 13 years, '[b]ut today, we turn the page.'" Secretary Salazar wasted no time; he issued a departmental order yesterday, December 9, implementing the first phases of the settlement (click here).  President Obama is said to have "urged Congress to 'act swiftly to correct this long-standing injustice and to remember that no special appropriations are required.'"

        The story is excerpted below.

Capping more than 13 years of litigation, the Obama administration said Tuesday the government will pay $1.4 billion to settle a class action accusing the United States of mismanaging billions of dollars held in trust for American Indians.

The settlement would resolve the plaintiffs' claims for an accounting of the trust fund, set up more than a century ago for the collection and dispersal of royalties from oil, gas, timber and other companies that leased Indian land. The agreement requires legislative and judicial approval.

Filed in the U.S. District Court for the District of Columbia in 1996 by Elouise Cobell, the class is one of the largest-ever in the nation's history. The $1.4 billion, which includes attorney fees, would be dispersed to the more than 300,000 American Indians who comprise the class. The settlement also creates a $2 billion fund for the voluntary buyback and consolidation of what government officials called "fractionated" land interests. Individual Indians will have the chance to receive payment for divided interest in land. The government would terminate the administrative costs associated with managing the fractioned land.

Attorney General Eric Holder Jr., addressing reporters at the Interior Department on Tuesday, said settlement talks failed repeatedly over 13 years, "But today, we turn the page." Holder appeared alongside Interior Secretary Ken Salazar.

.  .  .

Settlement talks ramped up after a ruling in July in the U.S. Court of Appeals for the D.C. Circuit put the case back before the trial court. At issue on appeal was whether the government could ever adequately perform a historical accounting of the money held in trust for more than a century. Last year, Judge James Robertson of the federal trial court in Washington ruled such an accounting was impossible. He ordered the government to pay $455 million to the plaintiffs, an amount that was a far cry from the billions the plaintiffs had been seeking. A three-judge appellate panel vacated Robertson's decision.

"While we vacate the district court's orders, including its holding of impossibility, we do so with substantial sympathy, recognizing that our precedents do not clearly point to any exit from this complicated legal morass," D.C. Circuit Chief Judge David Sentelle wrote in the July 24 appellate opinion.

For the full story, please click here.  Here is a link to key litigation documents, please click here.

        In addition to the $1.4 billion settlement to be paid out to individuals and the $2 billion fund for voluntary buyback and consolidation of fractionated land interests, the settlement also provides for the creation of an Indian Education Scholarship fund of up to $60 million to improve access to higher education for American Indians.


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