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$3.4 billion Indian land royalty settlement upheld

Posted: May 23, 2012 - 12:00am

HELENA, Mont. — A panel of appellate judges on Tuesday upheld a $3.4 billion settlement between the U.S. government and hundreds of thousands of Native American plaintiffs whose land trust royalties were mismanaged by the Interior Department.

The ruling means that settlement checks could be mailed to members of the class-action lawsuit within weeks, said plaintiffs’ attorney Dennis Gingold. Further appeals would delay that disbursement, and the attorney for the challenger, Kimberly Craven of Boulder, Colo., said they are considering their options.

The three-judge panel from the U.S. Court of Appeals for the District of Columbia dismissed the challenge by Craven, who had objected that the settlement did not include an actual accounting for how much money the government lost and said that the deal would overcompensate a select few beneficiaries.

But the judges said in their ruling that the government would be unable to perform an accurate accounting, the deal is fair and it is the best that can be hoped for to avoid years of additional litigation.

Craven’s characterization of the settlement as taking shortcuts “is to ignore the history of this hard-fought litigation and the obstacles to producing an historical accounting,” the judges said in their ruling.

The settlement is the result of a class-action lawsuit filed in 1996 by Blackfeet tribal member Elouise Cobell, who died of cancer in October. The lawsuit had originally sought to find out how much money had been mismanaged, squandered or lost by the Department of the Interior, which held the trust money for land allotted to Native Americans under the Dawes Act of 1887.

“Our deepest regret is that Ms Cobell did not live long enough to see this victory,” Gingold said in a statement

The lack of records created a problem in creating an accurate accounting of who was owed what, and the cost of creating such a record for each beneficiary would have cost more than what they were actually owed. After more than 13 years of litigation, the government and Cobell made a deal.

The agreement would pay out $1.5 billion to two classes of beneficiaries whose numbers have been estimated to be between 300,000 and 500,000. Each member of the first class would be paid $1,000. Each member of the second class would be paid $800 plus a share of the balance of the settlement funds as calculated by a formula.

Another $1.9 billion would be used by the government to purchase fractionated land allotments from willing individuals and turn those consolidated allotments over to the tribe. An education scholarship for young Indians also would be established under the agreement.

Congress approved the deal in December 2010 and U.S. District Judge Thomas Hogan approved it after a June 2011 hearing. Hogan said that while the settlement may not be as much as some wished, the deal provides a way out of a legal morass and provides some certainty for the beneficiaries.

As part of the deal, Cobell was awarded $2 million and the three other named plaintiffs were awarded between $150,000 and $200,000.

Craven and others objected and appealed the settlement, claiming the deal creates a conflict between the beneficiaries as some would be overpaid while others would be undercompensated for their claims. Creating a lump-sum award without an accounting creates an arbitrary payout system without knowing who is actually owed what, she argued.

The appellate panel quoted Hogan in saying, “It is hard to see how there could be a better result” than this settlement. Few beneficiaries are likely to have substantial claims, Craven did not provide evidence that some beneficiaries would be underpaid and Congress’ authorization of the deal “carries significant weight and sets this case apart from others,” the appellate court ruled.

Ted Frank, Craven’s attorney, said he believes they correctly argued the shortcomings of the settlement. Frank is considering his options, which could include a request for the full appellate court to review the decision.

“So we’re certainly disappointed, because we believed we were correct on the law, though we understood that we had an uphill battle given the exhaustion factor of a case that had already generated 22 (now 23) published opinions,” Frank said in an email to The Associated Press.

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