UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
In re BLACK FARMERS DISCRIMINATION ) Misc. No. 08-0511 (PLF)
LITIGATION )
_________________________________________ )
MEMORANDUM OPINION AND ORDER
Section V.E.13 of the Settlement Agreement in this case, as amended by the Court
on April 7, 2014, see Dkt. No. 405, provides for the distribution of unclaimed settlement funds to
cy pres beneficiaries proposed by Class Counsel and approved by the Court. That provision
states that such cy pres beneficiaries must be either:
(a) a law school that has a low-income taxpayer clinic or program
that provides tax advice or assistance to Class Members who have
received an award under the Settlement Agreement and that has
been approved by the Court, or
(b) a tax-exempt non-profit organization, other than a law firm, legal
services entity, or educational institution, that is providing
agricultural, business assistance, or advocacy services, including
assistance under Pigford and the Consolidated Case, to African
American farmers.
The Court is aware of the decisions of various courts of appeals suggesting that
unclaimed settlement funds ordinarily should not be distributed on a cy pres basis except when it
is not feasible to make further distributions to class members. See In re BankAmerica Corp. Sec.
Litig., 775 F.3d 1060, 1064 (8th Cir. 2015); Klier v. Elf Atochem North America, Inc., 658 F.3d
468, 475 (5th Cir. 2011). These decisions have relied in part on principles promulgated by the
American Law Institute. See AMERICAN LAW INSTITUTE, PRINCIPLES OF THE LAW OF
AGGREGATE LITIGATION § 3.07 (2010). The ALI principles now are being considered by the
Advisory Committee on Civil Rules as a potential model for additions to Rule 23(e) of the
Federal Rules of Civil Procedure. See Rule 23 Subcommittee Report, in Agenda Book for
Advisory Committee on Civil Rules, Washington, D.C., April 9-10, 2015, at 263-271. 1 The
relevance of these evolving principles of law to cases involving existing settlement agreements
that include cy pres provisions, like this case, recently has been considered by another judge of
this Court. See Keepseagle v. Vilsack, Civil Action No. 99-3119 (EGS), 2015 WL 4510837
(D.D.C. July 24, 2015).
In view of these authorities, the Court believes that before Class Counsel begins
the process contemplated by Section V.E.13 of the Settlement Agreement of identifying potential
cy pres beneficiaries and proposing an allocation of unclaimed settlement funds, the Court
should determine whether a cy pres distribution should be made in this action or whether,
instead, some or all of the unclaimed settlement funds should be distributed to Class Members.
To assist the Court in its consideration of this and related questions, the Court directs the parties
to file briefs of not more than 30 pages addressing the following issues:
1. If the case law presumes that identifiable class members are entitled to the
distribution of any excess funds, when feasible, why shouldn’t the Court attempt to further that
goal, which was of course the whole purpose of this litigation, rather than providing those funds
to disinterested third parties?
2. Absent agreement of the parties, does the Court have the authority under
the Settlement Agreement, Rule 60 of the Federal Rules of Civil Procedure, or otherwise, to
1
The Agenda Book is available at the following weblink:
http://www.uscourts.gov/rules-policies/archives/agenda-books/advisory-committee-rules-civil-
procedure-april-2015. The draft minutes of the April 9-10 meeting of the Advisory Committee
on Civil Rules also are available online. See Agenda Book for Committee on Rules of Practice
and Procedure, Washington, D.C., May 28-29, 2015, at 231-63 (discussion of cy pres at pages
256-57), available at http://www.uscourts.gov/file/18038/download.
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provide for the distribution of unclaimed settlement funds to Class Members rather than to cy
pres beneficiaries?
3. Do any acts of Congress pertinent to this case, such as the Food,
Conservation, and Energy Act of 2008 or the Claims Resolution Act of 2010, bear on whether it
would be permissible or appropriate to provide for the distribution of unclaimed settlement funds
to Class Members?
4. If the Court has the authority to act sua sponte to provide for the
distribution of unclaimed settlement funds to Class Members, either through modification of the
Settlement Agreement or through other means, what legal standard(s) should the Court apply in
determining whether taking such action would be appropriate?
5. In the interests of transparency, should the Court schedule a public hearing
inviting Class Members to offer their views regarding these issues?
The parties are not limited to these issues, and in their briefs may address other
issues that they believe are germane to the Court’s review of the cy pres provisions of the
Settlement Agreement and its consideration of what course of action to take.
Accordingly, it is hereby
ORDERED that the parties shall submit memoranda addressing the issues
outlined above on or before October 9, 2015.
SO ORDERED.
/s/____________________
PAUL L. FRIEDMAN
DATE: September 3, 2015 United States District Judge
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In Re Black Farmers Discrimination Litigation
Combined Opinion