Keepseagle v. Vilsack

102 F. Supp. 3d 306, 2015 U.S. Dist. LEXIS 57986, 2015 WL 1969814
District Court, District of Columbia·Decided May 4, 2015·No. Civil Action No. 99-3119 (EGS)·Published·Cited by 14 cases

Opinion

MEMORANDUM OPINION

Emmet G. Sullivan, United States District Judge

Pending before the Court is a motion filed by Class Counsel to modify the Settlement Agreement that was entered in this case in 2011. The Settlement Agreement created a $680,000,000 fund and included precise terms regarding the distribution of that fund to individual class members who could prove their claims in a non-Judicial Claims Process. In 2013, after the entire distribution process had been completed, Class Counsel notified the Court that approximately $380,000,000 remained in the fund. The Settlement Agreement mandates that this excess be distributed pursuant to a cy pres remedy.

Many involved-in this case would like to modify those provisions of the Settlement Agreement. Some prefer a modification that would direct that the $380,000,000 be distributed as supplemental payments to class members who succeeded under the non-Judicial Claims Process. Others have suggested reopening the Claims Process to new or previously unsuccessful claimants. Still others believe that opposition from the Department of Agriculture has made it impossible to obtain a modification that would alter the cy pres status of the funds, and have proposed modifications that would create cy pres distribution procedures to better handle the massive amount of money to be distributed.

[309] Class Counsel’s pending motion falls into the latter category. As this Court’s recent Opinions demonstrate, there is significant controversy over Class Counsel’s motion. See Keepseagle v. Vilsack (“Keepseagle I”), No. 99-3119, 307 F.R.D. 233, 2014 WL 5796751 (D.D.C. Nov. 7, 2014) (denying requests by two different groups to intervene in the case to.oppose Class Counsel’s motion); Keepseagle v. Vilsack (“Keepseagle II”), No. 99-3119, 102 F.Supp.3d 205, 2015 WL 1851093 (D.D.C. Apr. 23, 2015) (adjudicating preliminary motions filed by a class representative who intends to move under Federal Rule of Civil Procedure 60(b) for a different modification of the Settlement Agreement). A handful of issues remain to be decided by the Court, including the ultimate disposition of Class Counsel’s motion.

This Opinion addresses only a narrow issue: Whether Federal Rule of Civil Procedure 23(e) applies to Class Counsel’s motion for modification and, if not, whether the Court may nonetheless order Class Counsel to provide notice of their motion to the Class and permit class members to speak during the June 29, 2015. hearing on Class Counsel’s motion for modification. Upon consideration of the parties’ pleadings, the amicus curiae brief filed on behalf of many class members, the applicable law, and the entire recQrd, the Court finds that Rule 23(e) does not apply to Class Counsel’s motion, but that it is appropriate to direct that Class Counsel provide notice to the Class and to permit class members to speak at the June 29, 2015 hearing or to submit written comments in advance of that hearing.

I. Background

The complete background of this case and its current posture is set forth more fully in the Court’s recent Opinions. See Keepseagle I, 307 F.R.D. 233, 2014 WL 5796751; Keepseagle II, 102 F.Supp.3d 205, 2015 WL 1851093. In summary:

Following over a decade of litigation, the parties ' to this class action reached a Settlement Agreement. See Agreement, ECF No. 621-2. The Agreement created a Compensation Fund (“the Fund”) 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 approved] 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, business assistance, or advocacy services to Native American farmers between 1981 and [November 1, 2010].” Id. ¶ II.I (pp. 6-7).

Keepseagle I, 307 F.R.D. at 237, 2014 WL 5796751, at *2 (alterations in original). As this Court has emphasized, the provisions [310] of the Settlement Agreement regarding leftover funds “mandated that all excess funds be distributed pursuant to a cy pres remedy.” Keepseagle II, 102 F.Supp.3d at 213, 2015 WL 1851093, at *5 (emphasis in original).'

The Class also received notice of these provisions:

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 money remains 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.

Keepseagle I, 307 F.R.D. at 237, 2014 WL 5796751, at *2 (alterations in original).

The Settlement Agreement was presented to the Court in late 2010. See id. at 238, 2014 WL 5796751 at *3. The Court preliminarily approved it, and “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.” Id. (citing Order, ECF No. 577 at 3). “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), No appeal was filed from the Court’s approval óf the Agreement.” Id.

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Keepseagle v. Vilsack, 102 F. Supp. 3d 306, 2015 U.S. Dist. LEXIS 57986, 2015 WL 1969814 (D.D.C. 2015).

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