UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
________________________________
)
MARILYN KEEPSEAGLE, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 99-3119 (EGS)
)
TOM VILSACK, Secretary, U.S. )
Department of Agriculture, )
)
Defendant. )
________________________________)
MEMORANDUM OPINION
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.
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, 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,
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
2
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 record, 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, 2014 WL 5796751; Keepseagle II, 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
3
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, business assistance, or
advocacy services to Native American farmers between
1981 and [November 1, 2010].” Id. ¶ II.I (pp. 6–7).
Keepseagle I, 2014 WL 5796751, at *2 (alterations in original).
As this Court has emphasized, the provisions of the Settlement
Agreement regarding leftover funds “mandated that all excess
funds be distributed pursuant to a cy pres remedy.” Keepseagle
II, 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, 2014 WL 5796751, at *2 (alterations in original).
The Settlement Agreement was presented to the Court in late
2010. See id. 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
4
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 of the Agreement.”
Id.
The parties then commenced the non-Judicial Claims Process. On
August 30, 2013, after this process had come to a close, Class
Counsel filed a status report, notifying the Court that
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 and the Department of Agriculture could
not agree on how to proceed, Response to Status Report, ECF No.
649, so the Court held periodic status hearings and allowed the
parties additional time to come to an agreement.
On September 24, 2014, Class Counsel filed an unopposed motion
to modify the Settlement Agreement:
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: (1) they
must have “provided business assistance, agricultural
education, technical support, or advocacy services to
Native American farmers or ranchers between 1981 and
November 1, 2010 to support and promote their continued
engagement in agriculture”; and (2) they must be “either
5
a tax-exempt organization described in Section 501(c)(3)
of the Internal Revenue Code . . . educational
organization described in Section 170(b)(1)(A)(ii) of
the Code; or an instrumentality of a state or federally
recognized tribe, including a non-profit organization
chartered under the tribal law of a state or federally
recognized tribe, that furnishes assistance designed to
further Native American farming or ranching activities.”
Proposed Addendum to Agreement, ECF No. 709–2 ¶ II.A.
The modification utilizes the remainder of the Cy Pres
Fund to create a trust “for the purpose of distributing
the cy pres funds” which “shall seek recognition as a
non-profit organization under § 501(c)(3).” Id. ¶ II.B.
The trust would be required “to distribute the funds
over a period not to exceed 20 years” and would be
charged with disbursing the funds to “not-for-profit
organizations that have served or will serve Native
American farmers and ranchers.” Mot. to Modify, ECF No.
709–1 at 1. The Trust would be authorized to make grants
subject to the following restrictions: (i) “grants must
be to a tax-exempt organization described in Section
501(c)(3) of the Code; educational organization
described in Section 170(b)(1)(A)(ii) of the Code; or an
instrumentality of a state or federally recognized
tribe, including a non-profit organization chartered
under the tribal law of a state or federally recognized
tribe, that furnishes assistance designed to further
Native American farming or ranching activities”; and
(ii) “the organization must use the funds to provide
business assistance, agricultural education, technical
support, and advocacy services to Native American
farmers and ranchers, including those seeking to become
farmers or ranchers, to support and promote their
continued engagement in agriculture.” Proposed Addendum
to Agreement, ECF No. 709–2 ¶ II.B.
Keepseagle I, 2014 WL 5796751, at *3–4.
In October 2014, the Court raised three questions for the
parties in connection with Class Counsel’s proposal:
(1) whether the Court must direct notice to the Class
and hold a fairness hearing pursuant to Federal Rule of
Civil Procedure 23(e); (2) whether, if Rule 23 does not
permit the Court to require such notice and a hearing,
6
the Court may nonetheless exercise discretion to direct
notice to the class and to permit class members to give
their thoughts on . . . the proposed modification during
a status hearing or motion hearing; and (3) what content
and form any notice . . . should take.
Minute Order of October 20, 2014. The government and Class
Counsel assert that Rule 23(e) does not apply, but that the
Court may in its discretion direct notice and hold a status
hearing at which class members may speak. See Gov’t’s Br., ECF
No. 730; Class Counsel’s Br., ECF No. 731. The Great Plains
Claimants—a group of class members who succeeded under the non-
Judicial Claims Process—filed an amici curiae brief, in which
they argue that Rule 23(e) applies. See Great Plains Amicus, ECF
No. 741. The government and Class Counsel responded to that
brief. See Class Counsel Reply, ECF No. 742; Gov’t Reply, ECF
No. 743.
During a December 2, 2014 status hearing, the Court heard from
Marilyn Keepseagle, a class representative who had expressed
written opposition to Class Counsel’s motion. See Keepseagle II,
2015 WL 1851093, at *2. Ms. Keepseagle “discussed her opposition
to Class Counsel’s proposed modification and her support for a
proposal under which the cy pres funds would instead be
distributed to members of the class.” Id. “Accordingly, the
Court held further proceedings in abeyance, and granted Ms.
Keepseagle time to secure legal representation.” Id. After
securing counsel, Ms. Keepseagle and her husband, George
7
Keepseagle, filed two preliminary motions—for removal of certain
class representatives and to compel production of certain
materials by Class Counsel—on which they requested a decision
before beginning to brief their own motion for modification of
the Settlement Agreement. See id. The Court denied those motions
on April 23, 2015. See id. That same day, the Court set a
briefing schedule for both Class Counsel’s motion for
modification and the Keepseagles’s motion. See Order, ECF No.
771 at 1–2. The Court will now address the Rule 23(e) issues.
II. Rule 23(e) Does Not Apply to Class Counsel’s Proposed
Modification.
Both Class Counsel and the government assert that Federal Rule
of Civil Procedure 23(e) does not apply to Class Counsel’s
motion for modification of the Settlement Agreement because the
modification would not materially alter the legal rights of any
class member. Although the amici curiae disagree, the Court
finds that the parties are correct: Rule 23(e) applies only when
a modification materially hinders a class member’s legal right,
and this proposed modification would not do so.
A. Rule 23(e) Applies Only When a Modification Would
Materially Hinder a Class Member’s Legal Rights.
The underlying purpose of Rule 23’s procedural protections is
to protect the rights of absent class members whose legal claims
will be resolved by adjudication of the class’s claims:
8
Class actions are a form of representative litigation.
One or more class representatives litigate on behalf of
many absent class members, and those class members are
bound by the outcome of the representative’s litigation.
Ordinarily, such vicarious representation would violate
the due process principle that “one is not bound by a
judgment in personam in a litigation in which he has not
been made a party by service of process.” However, the
class action serves as an exception to this maxim so
long as the procedural rules regulating class actions
afford absent class members sufficient protection.
Newberg on Class Actions § 1:1 (5th ed. 2014); see also id. §
1:5 (“Rule 23 is constructed to ensure that the representative
nature of class action litigation safeguards these absent class
members’ due process rights.”). Subsections of Rule 23 create
procedures to ensure that absent class members are given such
protection in various ways. See, e.g., Wal-Mart Stores, Inc. v.
Dukes, 131 S. Ct. 2541, 2550 (2011) (“Rule 23(a) ensures that
the named plaintiffs are appropriate representatives of the
class whose claims they wish to litigate.”).
The settlement of class actions is governed by Federal Rule of
Civil Procedure 23(e), which provides that “[t]he claims,
issues, or defenses of a certified class may be settled,
voluntarily dismissed, or compromised only with the court’s
approval.” The Rule further requires that, when faced with any
“proposed settlement, voluntary dismissal, or compromise,” the
Court: (1) “must direct notice in a reasonable manner to all
class members who would be bound by the proposal”; and (2) “may
approve it only after a hearing and on finding that it is fair,
9
reasonable, and adequate,” if “the proposal would bind class
members.” Fed. R. Civ. P. 23(e). Consistent with Rule 23’s
concern for the legal rights of absent class members, then, the
touchstone for Rule 23(e) is whether the proposal would bind
class members.
Entry of a traditional settlement of a class’s legal claims
clearly implicates this rule. “‘An agreement between the parties
dismissing all claims is the equivalent of a decision on the
merits and thus claims settled by agreement are barred by res
judicata.’” Keepseagle I, 2014 WL 5796751, at *12 (quoting
Chandler v. Bernanke, 531 F. Supp. 2d 193, 197 (D.D.C. 2008)).
Absent class members who have not opted out of the class
therefore have their legal claims extinguished when a class-
action settlement is approved.
Modifications to a previously approved settlement may present
a more difficult issue. By definition, the class’s underlying
legal claims have already been extinguished by the original
settlement. A modification of that agreement, then, would not
necessarily have a further res judicata effect—the claim, after
all, has already been extinguished. Accordingly, courts
generally find that Rule 23(e) applies to a modification of a
previously approved settlement only when the settlement will be
“materially alter[ed].” In re Baby Prods. Antitrust Litig., 708
F.3d 163, 175 n.10, 182 (3d Cir. 2013). Phrased more
10
specifically, an amendment requires supplemental notice only
when it “would have a material adverse effect on the rights of
class members.” In re Diet Drugs Prods. Liability Litig., No.
99-20593, 2010 WL 2735414, at *6 (E.D. Pa. July 2, 2010); see
also Harris v. Graddick, 615 F. Supp. 239, 244 (M.D. Ala. 1985)
(“Under these limited circumstances where the amendment is
narrow and it is clearly apparent that the interests of the
classes are not substantially impaired, the court is of the
opinion that the notice already given is adequate and that
additional notice is not required pursuant to Rule 23(e).”); cf.
Manual for Complex Litigation § 21.61 (4th ed.) (“If the
fairness hearing leads to substantial changes adversely
affecting some members of the class, additional notice, followed
by an opportunity to be heard, might be necessary.”).
Courts have applied this principle in a handful of
circumstances. Where an amendment would merely “provide[] many
additional benefits, including additional funding for research
relating to [a medical condition connected to the class’s
injury] and a guarantee . . . regarding [defendant’s] continued
payment obligations,” no legal right was adversely affected and
Rule 23(e) did not apply. In re Diet Drugs, 2010 WL 2735414, at
*6; see also Shaffer v. Continental Cas. Co., 362 F. App’x 627,
631 (9th Cir. 2010) (“Although changes were made to the release
after potential class members received the notice, the changes
11
did not render the notice inadequate because they narrowed the
scope of the release.”); In re Integra Realty Resources, Inc.,
262 F.3d 1089, 1111 (10th Cir. 2001) (supplemental notice not
required where a proposed amendment merely “expand[s] the rights
of class members”); In re Prudential Ins. Co. Sales Practices
Litig., 962 F. Supp. 450, 473 n.10 (D.N.J. 1997) (“Class members
need not be informed of the Final Enhancements to the settlement
because the Proposed Settlement is only more valuable with these
changes.”), aff’d, 148 F.3d 283 (3d Cir. 1998). Even if a
modification does not provide additional benefits, Rule 23(e)
has been found not to apply to a modification that made only
“minor modifications . . . [, which] did not impair class
members’ rights even indirectly.” Jones v. Gusman, 296 F.R.D.
416, 467 (E.D. La. 2013).1
That is not to say that a modification can never hinder a
class member’s legal rights. Rule 23(e) would apply to a
1 Where a modification would materially affect the legal rights
of only some class members, notice to unaffected class members
is unnecessary, but affected class members must be notified. See
Nilsen v. York Cnty., 382 F. Supp. 2d 206, 221 n.9 (D. Me. 2005)
(“Because the class-wide settlement notice in this case already
satisfied the requirements of Rule 23(e)(1)(B), as I discussed
above, I would require notice of the amendment and the opt-out
right only to female class members who have already filed
claims, because they are the only class members who would be
negatively affected by such an amendment.”); White v. Nat’l
Football League, 836 F. Supp. 1458, 1468–69 (D. Minn. 1993)
(directing supplemental notice of amendments only to class
members that would be affected by the amendments).
12
modification that provided for lesser recovery to certain class
members than was available under the original agreement. See,
e.g., In re Diet Drugs Prods. Liability Litig., 226 F.R.D. 498,
518 (E.D. Pa. 2005). It would also cover a modification that
altered class member’s rights by “extinguish[ing] certain opt-
out rights.” Id. Even if these losses are exchanged for
“valuable benefits to class members,” the fact remains that
class members’s legal rights under the settlement would be
hindered, making Rule 23(e) applicable. See id. As the D.C.
Circuit has implicitly recognized in a related context, a class
member’s legal rights may be implicated when class counsel seeks
to bargain away the right to enforce portions of a previously
entered settlement. See Twelve John Does v. District of
Columbia, 117 F.3d 571 (D.C. Cir. 1997) (applying Rule
23(a)(4)’s adequacy-of-representation requirement, which is
similarly concerned with whether a class member’s legal rights
will be bound).
Where no legal right would be hindered, however, Rule 23(e)’s
procedural protections do not apply for the simple reason that
there is no risk that an absent class member will be legally
harmed by approval of the modification. Accordingly, an
amendment that neither adds to the res judicata effect of a
judgment by expanding the scope of covered claims nor otherwise
13
limits any legal right held by a class member need not be
subject to a renewed Rule 23(e) process.
B. Class Counsel’s Proposed Modification Does Not Alter the
Legal Rights of Class Members.
The Court directed extensive notice to the Class of the
Settlement Agreement in 2011, and the adequacy of that notice is
not challenged here. Nor did anyone appeal the Court’s approval
of that Settlement Agreement in 2011. There is thus no challenge
to the fact that the final Settlement Agreement extinguished the
legal claims of those who participated and mandated that all
leftover funds be used for cy pres purposes.2 The question, then,
is not whether choosing to utilize a cy pres remedy in the first
instance would alter the class’s legal rights if the Settlement
Agreement were silent on the disposition of excess funds (that
ship sailed in 2011); rather, it is whether the proposed
alternative procedures for distribution of those cy pres funds
would alter the legal rights of any class member.
Those who participated in the Settlement Agreement’s process
assented to the extinction of their legal claims through their
participation. Those who did not participate but failed to opt
2 It is on this point that the amici err. Their argument presumes
that individual class members retain a legal right to possession
of the excess funds, even though the Settlement Agreement
required that all excess funds be transferred to a Cy Pres Fund
and distributed pursuant to a cy pres remedy. See Keepseagle II,
2015 WL 1851093 at *5.
14
out similarly had their legal claims extinguished. See
Keepseagle I, 2014 WL 5796751, at *12 (“Once the Agreement was
approved and no appeal was filed, the claims of class members
who did not opt out were extinguished, in accordance with the
Agreement’s terms.”) (citing Agreement ¶¶ VI.A (p. 15), X (pp.
51–52)). Accordingly, no member of the Class retains a live
legal claim.
Nor does any individual class member have a property interest
in the unclaimed funds, as this Court previously held:
“In approaching the question of the appropriate
distribution of such funds, various courts have
determined that ‘neither the class members nor the
settling defendants have any legal right to unclaimed or
excess funds.’” Diamond Chem. Co. v. Akzo Nobel Chems.
B.V., 517 F. Supp. 2d 212, 217 (D.D.C. 2007) (quoting
Powell[ v. Georgia-Pacific Corp.], 843 F. Supp. [491,
]495 [(W.D. Ark. 1994)], aff’d, 119 F.3d 703, 706 (8th
Cir. 1997) (“neither party has a legal right to the
unclaimed funds”)); see also Wilson v. Southwest
Airlines, 880 F.2d 807, 811 (5th Cir. 1989) (“We agree
with the district court that . . . none of the parties
in this case has a legal right to the balance of the
fund.”); In re Folding Carton Antitrust Litig., 744 F.2d
1252, 1254 (7th Cir. 1984) (“we agree that neither the
plaintiff class nor the settling defendants have any
right to the reserve fund”); In re Motorsports
Merchandise Antitrust Litig., 160 F. Supp. 2d 1392, 1393
(N.D. Ga. 2001) (“Neither the class members nor the
settling defendants have any legal right to unclaimed or
excess funds.”) (alteration and quotation marks
omitted). Once a settlement agreement is final, “all
class members who presented their claims received the
full payment due them, and those who did not present
claims have waived their legal right to do so. Thus, the
class has no further legal rights in the fund.” Wilson,
880 F.2d at 811–12.
15
Professor Rubenstein echoes this position in the most
recent edition of Newberg on Class Actions. Although
there is some dispute over the property status of
unclaimed funds, “most courts start from the proposition
that neither the plaintiff class nor the settling
defendants have any right to the unclaimed or excess
funds.” Newberg on Class Actions § 12:28 (5th ed. 2014)
(quotation marks omitted). The argument that unclaimed
settlement funds are property of the class is
problematic, he posits:
The premise that the recovery fund is the
property of the plaintiff class is not quite
right because the settlement fund does not
truly belong to the class as a whole, but
rather to the class members individually. When
a class member does not claim her share of the
fund, it is not at all obvious that her share
therefore belongs to the other class members.
If, for example, the government distributed a
tax refund to a group of taxpayers but some
did not cash their checks, no one would
seriously propose that the unclaimed funds are
the property of, and should be distributed pro
rata to, those other citizens who received tax
refunds . . . . Additionally, an individual’s
presence as a class member in a class action
hardly expands her property rights to include
the property of the other class members. Even
if it is the case that the claiming class
members have received less than the full value
of their claims by the settlement, that fact
does not magically make the nonclaimaints’
property theirs.
Id. § 12:30.
Keepseagle I, 2014 WL 5796751, at *12–13.
Because all class members have settled their legal claims and
retain no property interest in the unclaimed funds, a
modification of the procedures for distributing the unclaimed
funds as cy pres would not alter the legal rights of any class
16
member. The class members are affected to the extent that they
would like the Settlement Agreement to be modified to permit
additional payments directly to class members. But that is not a
harm caused by the proposed modification; rather, it stems from
the plain language of the Settlement Agreement. The
modifications to the cy pres distribution scheme therefore do
not have a material impact on the legal rights of any class
member, making Rule 23(e)’s procedural requirements
inapplicable.
III. The Court Will Order Notice to the Class and Hold a Hearing
at Which Class Members May Speak.
Although Rule 23(e) does not apply to Class Counsel’s pending
motion, the Court finds that it has the authority to require
Class Counsel to provide notice to the Class of the pending
motion, and that the Court may permit class members to speak
during the June 29, 2015 motion hearing or to submit written
comments in advance of that hearing.
A. The Court Has Authority to Order Class Counsel to Provide
Notice to the Class and to Solicit Written and Oral
Comments from the Class.
Although Rule 23(e) does not apply to the pending motion, the
Court has the authority to follow similar procedures in
connection with Class Counsel’s motion.
As to notice, this authority rests on two sources: First,
Federal Rule of Civil Procedure 23(d)(1)(B) permits the Court to
17
“require—to protect class members and fairly conduct the action—
giving appropriate notice to some or all class members of: (i)
any step in the action.” Second, the Settlement Agreement
provides that it “may be modified only with the written
agreement of the Parties and with the approval of the District
Court, upon such notice to the Class, if any, as the District
Court may require.” Agreement, ECF No. 621-2 ¶ XIV (p. 53)
(emphasis added).
As Class Counsel and the government concede, the Court has
ample authority to order that notice be provided to the Class.
See Class Counsel’s Br., ECF No. 731 at 6–7; Gov’t’s Br., ECF
No. 730 at 3–4. Pursuant to Rule 23(d)(1)(B), the Court finds
that, to “fairly conduct the action” at this stage, class
members must be informed fully about the pending proceedings.
Even in the absence of Rule 23(d), the Court would exercise the
discretion granted to it by the Settlement Agreement because the
extensive interest in these proceedings, as evidenced by the
volume of correspondence the Court has received and the
significant attendance at status hearings the Court has held,
makes clear that it is appropriate and necessary to ensure that
the Class is as informed as possible about upcoming proceedings.
Although the Court is not empowered to hold a Rule 23(e)
fairness hearing, the Court retains the authority to hear from
any class member who wishes to speak during the June 29, 2015
18
motion hearing. Cf. Landis v. N. Am. Co., 299 U.S. 248, 254
(1936) (describing the “power inherent in every court to control
the disposition of the causes on its docket with economy of time
and effort for itself, for counsel, and for litigants”). Hearing
these comments—or receiving written comments from those who
cannot attend—will be useful to the Court’s consideration of the
pending motions. See Keepseagle II, 2015 WL 1851093, at *11.
Class Counsel and the government, moreover, do not oppose this
approach. See Class Counsel’s Br., ECF No. 731 at 6–7; Gov’t’s
Br., ECF No. 730 at 4.
B. Class Counsel Shall Provide Notice of the Posture of this
Case and the Class’s Ability to Provide Comment.
The final question briefed by the parties and the amici is the
appropriate content and form of any notice ordered by the Court.
Three issues arise from these pleadings: (1) the content of the
notice; (2) the manner of its distribution; and (3) who should
bear the cost of providing the notice.
Content of the Notice: The government, Class Counsel, and the
amici agree that the notice should be tailored to the
modification proposal pending before the Court. They do not
dispute that the notice should describe: (a) the class and its
claims; (b) the history of this case and the fact that the
notice relates to a proposed modification of a preexisting
Settlement Agreement and that no claims process is yet being
19
reopened; (c) the proposed modification and the trustee
nominations that have been made; (d) the hearing that the Court
has scheduled, including a discussion of a class member’s right
to file written comments or to speak in Court; and (e) a link to
the IndianFarmClass.com website. See Class Counsel’s Br., ECF
No. 731 at 7–8; Gov’t Br., ECF No. 730 at 4; Great Plains Br.,
ECF No. 741 at 10. The Court will direct Class Counsel to file
for Court approval a proposed Notice to conform with these
requirements.
The Great Plains amici request that the notice also include a
copy of the motion for modification of the Settlement Agreement
and copies of two declarations that were submitted regarding the
investment of the leftover settlement funds. See Great Plains
Br., ECF No. 741 at 10. The Court agrees with Class Counsel that
this is unnecessary—even the original settlement notice did not
include a copy of the full Settlement Agreement. See Class
Counsel Reply, ECF No. 742 at 4–5. The purpose of the notice is
to provide a summary of relevant information, so complete copies
of documents need not be included.
Distribution of the Notice: Class Counsel and the government
emphasize that notice should be distributed to all class
members. See Class Counsel Reply, ECF No. 742 at 3–4; Gov’t
Reply, ECF No. 743 at 2–3. The Great Plains amici appear to
suggest that notice be limited to “all claimants,” implying that
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it should go only to those who filed claims under the Settlement
Agreement. See Great Plains Br., ECF No. 741 at 10. The Class,
however, includes members who did not file claims, so it would
be improper to limit the notice in that manner.
As for the method of distribution, the Court will direct that
a more limited version of the distribution conducted in
connection with the original settlement notice be undertaken.
Publication notice is appropriate, but need only occur for one
day rather than for multiple days. The Court agrees with Class
Counsel that “notice can be sent by mail to all persons who
filed claims, as well as addresses obtained for the original
2010 mailing” and that “notice would also be posted on the
website IndianFarmClass.com.” Class Counsel Br., ECF No. 731 at
9. The Court also agrees with the suggestion of the amici that
notice be mailed and e-mailed “to tribal offices for those
tribes whose members filed claims, with a request that such
information be made available for inspection and posted to
tribal websites.” Great Plains Br., ECF No. 741 at 11.
Cost: Class Counsel and the government appear to dispute who
should bear the cost of providing the notice. Class Counsel rely
on the Settlement Agreement, which provided government-funded
“Implementation Costs” of up to four payments of $5,000,000
each. See Agreement, ECF No. 621-2 ¶¶ VII.B–C (pp. 16–17); Class
Counsel Br., ECF No. 731 at 10. According to Class Counsel, one
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of these $5,000,000 payments is not yet exhausted, leaving
$1,500,000 to be used. See Class Counsel Br., ECF No. 731 at 10.
The government appears to disagree, noting that the Agreement
defined “Implementation Costs” as “the administrative costs
associated with implementing this Settlement Agreement,
including the fees and costs of the Track A and Track B
Neutrals, the Track B Expert, the Claims Administrator, costs
incurred under Section IX, and the costs necessary to provide
notice of this Settlement Agreement to the Class.” Id. ¶ II.Y
(p. 8); see Gov’t Br., ECF No. 730 at 5 n.2. It is not clear,
however, whether the government opposes Class Counsel’s proposed
use of the $1,500,000 leftover from earlier implementation
payments. Accordingly, the Court declines to address the cost
issue unless and until it becomes necessary—either because the
government disputes Class Counsel’s ability to utilize the
remaining $1,500,000, or if the costs of providing the
supplemental notice exceed $1,500,000.
IV. Conclusion
For the foregoing reasons, the Court finds that Federal Rule
of Civil Procedure 23(e) does not apply, but that the Settlement
Agreement and the Court’s supervisory authority over this case
permit the Court to direct that Class Counsel provide notice to
the Class, and to allow class members to submit written comments
or to speak during the hearing to be held on June 29, 2015 at
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9:00 a.m. An appropriate Order accompanies this Memorandum
Opinion.
SO ORDERED.
Signed: Emmet G. Sullivan
United States District Judge
May 4, 2015
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