[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
H.R. 887, TO DIRECT THE SECRETARY OF THE INTERIOR TO SUBMIT A REPORT
ON INDIAN LAND FRACTIONATION
=======================================================================
LEGISLATIVE HEARING
before the
SUBCOMMITTEE ON INDIAN AND
ALASKA NATIVE AFFAIRS
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
Tuesday, April 5, 2011
__________
Serial No. 112-18
__________
Printed for the use of the Committee on Natural Resources
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COMMITTEE ON NATURAL RESOURCES
DOC HASTINGS, WA, Chairman
EDWARD J. MARKEY, MA, Ranking Democrat Member
Don Young, AK Dale E. Kildee, MI
John J. Duncan, Jr., TN Peter A. DeFazio, OR
Louie Gohmert, TX Eni F.H. Faleomavaega, AS
Rob Bishop, UT Frank Pallone, Jr., NJ
Doug Lamborn, CO Grace F. Napolitano, CA
Robert J. Wittman, VA Rush D. Holt, NJ
Paul C. Broun, GA Raul M. Grijalva, AZ
John Fleming, LA Madeleine Z. Bordallo, GU
Mike Coffman, CO Jim Costa, CA
Tom McClintock, CA Dan Boren, OK
Glenn Thompson, PA Gregorio Kilili Camacho Sablan,
Jeff Denham, CA CNMI
Dan Benishek, MI Martin Heinrich, NM
David Rivera, FL Ben Ray Lujan, NM
Jeff Duncan, SC John P. Sarbanes, MD
Scott R. Tipton, CO Betty Sutton, OH
Paul A. Gosar, AZ Niki Tsongas, MA
Raul R. Labrador, ID Pedro R. Pierluisi, PR
Kristi L. Noem, SD John Garamendi, CA
Steve Southerland II, FL Colleen W. Hanabusa, HI
Bill Flores, TX Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann,
TN
Jon Runyan, NJ
Bill Johnson, OH
Todd Young, Chief of Staff
Lisa Pittman, Chief Counsel
Jeffrey Duncan, Democrat Staff Director
David Watkins, Democrat Chief Counsel
------
SUBCOMMITTEE ON INDIAN AND ALASKA NATIVE AFFAIRS
DON YOUNG, AK, Chairman
DAN BOREN, OK, Ranking Democrat Member
Tom McClintock, CA Dale E. Kildee, MI
Jeff Denham, CA Eni F.H. Faleomavaega, AS
Dan Benishek, MI Ben Ray Lujan, NM
Paul A. Gosar, AZ Colleen W. Hanabusa, HI
Raul R. Labrador, ID Edward J. Markey, MA, ex officio
Kristi L. Noem, SD
Doc Hastings, WA, ex officio
------
CONTENTS
----------
Page
Hearing held on Tuesday, April 5, 2011........................... 1
Statement of Members:
Boren, Hon. Dan, a Representative in Congress from the State
of Oklahoma................................................ 4
Gosar, Hon. Paul A., a Representative in Congress from the
State of Arizona, Prepared statement of.................... 34
Hastings, Hon. Doc, a Representative in Congress from the
State of Washington........................................ 5
Prepared statement of.................................... 6
Markey, Hon. Edward J., a Representative in Congress from the
State of Massachusetts, Prepared statement of.............. 34
Young, Hon. Don, the Representative in Congress for the State
of Alaska.................................................. 1
Prepared statement of.................................... 3
``Excerpts of the Government Position on the effort by
Cobell lawyers to get $223 million'' submitted for the
record................................................. 35
Statement of Witnesses:
Bordeaux, Rodney M., President, Rosebud Sioux Tribe, South
Dakota, Statement submitted for the record................. 9
Douville, Patricia, Council Representative, Rosebud Sioux
Tribe, Oral statement on behalf of Rodney M. Bordeaux,
President, Rosebud Sioux Tribe............................. 7
Monette, Richard, Professor of Law, University of Wisconsin,
Madison, Wisconsin, and Former Tribal Chairman and Current
IIM Account Holder......................................... 10
Prepared statement of.................................... 11
Additional materials supplied:
Dorr, Gary, Citizen of the Nez Perce Tribe, Enrollment No.
2528, Letter submitted for the record by Congressman Raul
R. Labrador (R.-ID)........................................ 15
``Excerpts of the Government Position on the effort by Cobell
lawyers to get $223 million'' submitted for the record by
Chairman Don Young......................................... 35
LEGISLATIVE HEARING ON H.R. 887, TO DIRECT THE SECRETARY OF THE
INTERIOR TO SUBMIT A REPORT ON INDIAN LAND FRACTIONATION, & FOR OTHER
PURPOSES.
----------
Tuesday, April 5, 2011
U.S. House of Representatives
Subcommittee on Indian and Alaska Native Affairs
Committee on Natural Resources
Washington, D.C.
----------
The Subcommittee met, pursuant to call, at 11:00 a.m. in
Room 1334, Longworth House Office Building, Hon. Don Young
[Chairman of the Subcommittee] presiding.
Present: Representatives Young, Gosar, Labrador, Noem,
Hastings [ex officio], Boren, Kildee, Lujan, Hanabusa.
STATEMENT OF HON. DON YOUNG, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF ALASKA
Mr. Young. The Subcommittee will come to order. The
Chairman notes the presence of a quorum. The Subcommittee on
Indian and Alaska Native Affairs is meeting today to hear
testimony on H.R. 887, to direct the Secretary of the Interior
to submit a report on Indian land fractionation, and for other
purposes.
Under Committee Rule 4[f], opening statements are limited
to the Chairman and Ranking Member of the Subcommittee, so that
way we can hear from our witnesses more quickly.
However, I ask for unanimous consent to include any other
Members' opening statements in the hearing record if submitted
to the Clerk by the close of business today. Hearing no
objection, so ordered.
The purpose of today's hearing is to hear testimony on H.R.
887, a bill that I introduced with the Chairman of the Full
Committee, Doc Hastings, and the gentleman from Arizona, Mr.
Gosar.
H.R. 887 establishes a cap of $50 million on fees and
expenses that may be awarded to Plaintiffs' attorneys pursuant
to the Cobell Settlement agreement. It also requires the
Department of the Interior to submit to Congress a report
regarding its plans to consolidate highly fractionated Indian
lands using the $1.9 billion in direct spending provided in the
Cobell Settlement for this purpose.
Under the Claims Resolution of 2010, Congress authorized
the United States District Court to approve the Cobell
Settlement agreement. Congress did so with assurances from the
Government and the Plaintiffs that attorneys' fees would be
limited to an amount between $50 million, and $100 million
pursuant to a side agreement that they signed in December of
2009.
Before this Committee, the Named Plaintiff testified that
her attorneys, quote, ``had agreed to limit their petition for
fees to under $100 million.'' Even this amount is excessive in
my mind.
As the administration points out, only $360 million of the
settlement funds are based on claims that counsel actually
litigated. The remaining funds are the result, not of tens of
millions of dollars' worth of work performed by class counsel,
but rather the government's desire to resolve the claims of the
IIM account holders themselves.
Paying lawyers $50 million to $100 million for claims
valued at 360 million sparked a controversy that delayed
passage of a settlement for an entire year. Not only did the
attorneys fail to justify these fees to the Committee, but the
government and Plaintiffs lawyers structured the settlement so
that all legal fees must be paid by the individual Indians and
not the government.
Little did anyone know that the Named Plaintiff who made
her statement before this Committee, the Plaintiffs were
apparently concealing the existence of a contingency fee
agreement providing the attorneys with a recovery of $223
million.
It was publicly revealed for the first time two days after
the President signed the Claims Resolution Act into law. Is
this a bait-and-switch, a game of Three Card Monte, or a ploy
to convince the court that $100 million should be kind of a
consolation prize?
I don't know how to answer this, but I do know that this
Committee had a right to know about this contingency fee
agreement when the Named Plaintiff and her attorneys testified
about the legal fees of that case to the Committee.
Today, the Plaintiffs are stonewalling the efforts of this
Committee to get to the bottom of the fee controversy, and are
refusing to testify, or to respond to numerous written
inquiries over the last year seeking information about their
fees.
I voted for the Claims Resolution Act, but I now worry that
the integrity of the Act has been compromised by the
Plaintiffs' lawyers. Their actions are frustrating the efforts
of the Members to protect the interests of 500,000 Indians,
whose payments are now threatened by grossly excessive legal
fees.
I don't want to let the government off the hook. The
Department of the Interior and Justice have refused to testify
on the grounds that the matter in which the Subcommittee seeks
testimony is an active litigation. This is not an excuse the
Committee has historically recognized.
It is also unprecedented. During the previous
administration officials with the Department of the Interior
voluntarily testified on numerous occasions to the House and
Senate Committees while Cobell was in active litigation.
They also engaged in confidential mitigation with the
Plaintiffs under the direct and personal supervision of the
staff of the House and Senate Committees of jurisdiction, and
the current administration testified on settlement last year.
In any case, the Department of the Interior and Justice
have advised the Committee that the position of the government
is entirely reflective of the brief that has been submitted to
the court.
It is the view of the government on the attorneys' fees
that it is important for Members to review, but I do not wish
to take the Committee's time quoting them. As part of my
written statement provided for the record, I have provided key
excerpts from the government's position on attorneys' fees.
May I say that if they continue to stonewall me, I will
subpoena those people, litigation or no litigation, and then
see how we go forward from there. At this time, I recognize the
Ranking Member, the gentleman from Oklahoma, Mr. Boren, for any
statement that he would like to make.
[The prepared statement of Chairman Young follows:]
Statement of The Honorable Don Young, Chairman,
Subcommittee on Indian and Alaska Native Affairs
The purpose of today's hearing is to hear testimony on H.R. 887, a
bill I introduced with the Chairman of the full Committee, Doc
Hastings, and the Gentleman from Arizona, Mr. Gosar.
H.R. 887 establishes a cap of $50 million on fees and expenses that
may be awarded to plaintiffs' attorneys pursuant to the Cobell
Settlement Agreement. It also requires the Department of the Interior
to submit to Congress a report regarding its plans to consolidate
highly fractionated Indian lands using the $1.9 billion in direct
spending provided in the Cobell Settlement for this purpose.
Under the Claims Resolution Act of 2010, Congress authorized the
U.S. District Court to approve the Cobell Settlement Agreement.
Congress did so with assurances from the Government and the plaintiffs
that attorneys' fees would be limited to an amount between $50 million
and $100 million pursuant to a side agreement they signed in December
2009.
Before this Committee, the Named Plaintiff testified that her
attorneys [quote] ``have agreed to limit their petition for fees to
under $100 million.''
Even this amount is excessive. As the Administration points out ``.
. .only $360 million of the settlement funds are based on claims that
counsel actually litigated. The remaining funds are the result, not of
tens of millions of dollars' worth of work performed by class counsel,
but rather the government's desire to resolve the claims of the IIM
account holders themselves.''
Paying lawyers between $50 million and $100 million for claims
valued at $360 million sparked a controversy that delayed passage of
the Settlement for an entire year. Not only did the attorneys fail to
justify these fees to this Committee, but the Government and plaintiff
lawyers structured the Settlement so that all legal fees must be paid
by the individual Indians, not the Government.
Little did anyone know that when the Named Plaintiff made her
statement before the Committee, the plaintiffs were apparently
concealing the existence of a contingency fee agreement providing the
attorneys with a recovery of $223 million. It was publicly revealed for
the first time two days after the President signed the Claims
Resolution Act into law.
Is this a bait-and-switch, a game of Three Card Monte, or a ploy to
convince the Court that $100 million should be a kind of consolation
prize?
I don't know the answer to this, but I do know this Committee had a
right to know about this contingency fee agreement when the Named
Plaintiff and her attorney testified about the legal fees of this case
in this Committee.
Today, the Plaintiffs are stonewalling the efforts of this
Committee to get to the bottom of the fee controversy in their refusal
to testify or to respond to numerous written inquiries over the last
year seeking information about their fees.
I voted for the Claims Resolution Act, but I now worry that the
integrity of the Act has been compromised by the Plaintiffs' lawyers.
Their actions are frustrating the efforts of Members to protect the
interest of the 500,000 Indians whose payments are now threatened by
grossly excessive legal fees.
I don't want to let the Government off the hook. The Departments of
Interior and Justice have refused to testify on the grounds that ``the
matter on which the Subcommittee seeks testimony is in active
litigation.''
This is not an excuse the Committee has historically recognized. It
is also unprecedented. During the previous Administration, officials
with the Department of the Interior voluntarily testified on numerous
occasions in House and Senate committees while Cobell was in active
litigation. They also engaged in confidential mediation with the
Plaintiffs under the direct, personal supervision of staff of the House
and Senate committees of jurisdiction. And the current Administration
testified on the Settlement last year.
In any case, the Departments of Interior and Justice have advised
the Committee that the position of the Government ``is entirely
reflected in the briefs that it submitted to the court. . .''
The views of the Government on the attorney fees are important for
Members to review but I do not wish to take up the Committee's time
quoting them now. As part of my written statement submitted for the
record, I am providing key excerpts of the Government's position on
attorney fees.
______
STATEMENT OF HON. DAN BOREN, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF OKLAHOMA
Mr. Boren. Thank you, Mr. Chairman. After nearly 14 years
of contentious litigation, Congress, by an overwhelming
majority, authorized $3.4 billion to settle the Cobell v.
Salazar class action lawsuit.
This authorization approved the proposed settlement
agreement between the United States and over 500,000 individual
Indian beneficiaries. Last December, we closed the chapter on
more than 100 years of Federal mismanagement of Indian trust
funds and land claims.
After decades of ignoring the problem, Congress passed the
settlement and President Obama signed it into law. It was an
historic day for Indian Country, and set in motion the next
steps for the Judicial Branch to issue its final approval of
the settlement.
Indeed, the Cobell Settlement process is a lesson in
civics. By enacting it in the last Congress, the Legislative
Branch authorized the funding to effect the settlement. By
signing the bill, the Executive Branch enacted that authority
into law. Now the Judicial Branch, in fulfillment of its
appropriate government function, must decide whether the
settlement is fair and reasonable before Indian beneficiaries
may begin to receive payment for overdue justice.
This decision must include a careful look at attorneys'
fees. H.R. 887 trends very closely to disrupting the fine
balance struck by the separation of powers principles that
guide our government.
It improperly attempts to interfere with ongoing litigation
by limiting the amount of attorneys' fees that a Federal judge
may award. This creates an appearance of undue political and
Congressional influence over litigation decisions.
In short, this bill is well meaning, but the fact of the
matter is that it invites constitutional inquiry and improperly
interferes with the judicial process. Indian Country has waited
far too long for justice to be achieved in this case.
We must now let the Judicial Branch do its work to provide
finality and close the book on a century of broken promises. I
will say to the Chairman that I do agree with him. I have a
concern about these excessive fees, and maybe $50 million is
the right mark.
So I look forward to working with you, and I believe that
the court should sort of do this right now, but I understand
your frustration, especially with--you know, we want the money
going to Indian Country, and not a lot of attorneys. So I yield
back. Thank you.
Mr. Young. I thank the gentleman, and the one thing that
bothers me the most was the contingency fee was not announced
until two days after the bill was signed. And I don't think
that any of the Plaintiffs would have agreed to that if they
had not been a contingency fee with one person or a small
group.
Because we were told in this Committee that it was less,
and between $50 million to $100 million, and we thought $100
million was too much with the bills introduced by the Chairman
was $50 million.
The settlement was about $350 million in legal work and
then they get $100 million, and that is pretty high itself. But
now it was announced after the fact, and after it was signed
into law--and I agree with you that justice has been long
overdue.
I have been in this program for about 17 years, and when we
get to a settlement, we originally thought that there was $17
billion of misconduct by the Federal Government on Native lands
by very frankly doing some very strange things, and they
conveniently lost the records.
And so when they settled this, OK, I said fine, and I voted
for it. But what bothered me was then we find out there is $223
million in legal fees. And I have been through this legal
aspect for a while, and I don't particularly have a great
fondness for that process.
So with that, I now recognize the Chairman of the Full
Committee, Doc Hastings.
STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WASHINGTON
Mr. Hastings. Thank you, Mr. Chairman, and thank you for
introducing H.R. 887, and I am pleased to be a cosponsor of
that bill. Let us be clear. Every dollar paid to the attorneys
comes directly out of the pockets of individual Indians.
This bill is focused on ensuring those individual Indians
for whom this settlement was reached are the ones who benefit,
and that what is owed to individual Indians under the law is
not fleeced away by a handful of lawyers demanding over $200
million based on a secret deal known only to themselves.
During the second session of the 111th Congress, when the
Cobell Settlement was pending, Members of the Committee were
advised that the lawyers were seeking $50 million to $100
million in legal fees, and costs, pursuant to an agreement on
attorneys' fees that was signed by both parties to the lawsuit,
the government and the Plaintiffs.
In testimony made in front of this Committee in March of
2010, the Named Plaintiff said that her attorneys would not
seek more than $100 million. The government witnesses also
described the $50 million to the $100 million fee range as
being agreed upon.
And it was on those assurances that the Members of this
Congress made their decision. At the time, the $50 million to
$100 million fee range was considered by many to be
extraordinary, including me.
A number of prominent tribal organizations and known
experts on the Cobell litigation recommended that Congress
amend the settlement to impose a cap at $50 million. These
questions about excessive fees led me twice to file amendments
to impose such a cap.
Both times the Rules Committee, under the control of the
Democrats, blocked me from even offering these ceiling
limitation amendments. So imagine everyone's surprise when
shortly after the President signed the Claims Resolution Act
that the Plaintiffs revealed that they had been hiding a
contingency fee in which they claim they were owed $223
million.
The chief Senate advocate of the Cobell Settlement, Senate
Indian Affairs Committee Chairman Byron Dorgan, called this
development shameful, and he went on to say, and I quote, ``it
is not a level that is acceptable, and is not a level that was
contemplated by the agreement.''
Mr. Chairman, I would hope that Members of the Committee
concur in the statement made by the former Chairman, and that
we take a real hard look to protect the interests of those
500,000 Indians that are affected.
And, last, it is very disappointing that the Department of
Justice and Interior refused to testify at this hearing. To
claim that this case is in active litigation as an excuse for
not testifying just defies all history.
Time after time, after time, the government had testified
on this case when it was in litigation. Their position in court
was to limit fees to $50 million, which of course is what H.R.
887 would do. They even reiterated that position in refusing to
testify today in front of the Committee. But even more
frustrating and outrageous is the refusal of the Plaintiffs'
attorneys themselves to testify.
They have been asked to provide this Committee with a copy
of their secret contingency agreement and other information
used to justify their fee claim. They refused that request last
year, and when asked again this year, they again refused.
So what do they do instead? They hired attorneys to
represent them--lawyers hiding secret agreements to enrich
themselves at the expense of individual Indians--lawyers hiring
lawyers, instead of being open and transparent.
Mr. Chairman, that is why H.R. 887 was introduced and why
this hearing is necessary, and why further action by this
Committee should be expected. Again, I want to commend the
Chairman for convening this hearing and introducing this bill,
and I look forward to hearing the testimony of our witnesses.
[The prepared statement of Mr. Hastings follows:]
Statement of The Honorable Doc Hastings, Chairman,
Committee on Natural Resources
I want to thank the Chairman of the Subcommittee for introducing
H.R. 887 and holding an expedited hearing on it. I am an original
cosponsor of this bill.
Let's be clear: every dollar paid to the attorneys comes directly
out of the pocket of individual Indians. This bill is focused on
ensuring those individual Indians for whom this settlement was reached
are the ones who benefit, and what is owed to individual Indians under
the law isn't fleeced away by a handful of lawyers demanding over $200
million dollars based on a secret deal known only to themselves.
During the second session of the 111th Congress when the Cobell
Settlement was pending approval, Members of the Committee were advised
that the lawyers were seeking $50 million to $100 million in legal fees
and costs pursuant to an Agreement on Attorney fees that was signed by
both Parties to the lawsuit, the government and the plaintiffs.
In testimony made in this Committee in March 2010, the Named
Plaintiff said her attorneys would not seek more than $100 million. The
Government witnesses also described the $50 million to $100 million fee
range as being agreed upon. And it was on these assurances that Members
made their decision.
At the time, the $50 million to $100 million fee range was
considered by many to be extraordinary. A number of prominent tribal
organizations and noted experts on the Cobell litigation recommended
that Congress amend the Settlement to impose a fee cap of $50 million.
These questions about excessive fees led me twice to file
amendments to impose such a cap. Both times, the Rules Committee under
the control of House Democrats blocked me from offering my fee
limitation amendments.
So imagine everyone's surprise when shortly after the President
signed the Claims Resolution Act into law, the plaintiffs revealed they
had been hiding a contingency fee agreement under which they claim to
be owed $223 million.
The chief Senate advocate of the Cobell Settlement, Senate Indian
Affairs Committee Chairman Byron Dorgan, called this development
``shameful.''
Senator Dorgan added that $223 million ``is not a level that is
acceptable and it's not a level that was contemplated by the
agreement.''
Mr. Chairman, I would hope that Members of the Committee concur in
the statement made by the former Chairman of the Senate Indian Affairs
Committee, and take steps to protect the interests of 500,000
individual Indians by supporting H.R. 887.
Lastly, it is very disappointing that the Departments of Justice
and Interior refused to testify at this hearing. To claim that the case
is in active litigation as an excuse just defies all history. Time
after time after time, the government had testified on this case it was
in litigation. Their position in court is to limit fees to $50 million,
which is what H.R. 887 would do. They even reiterated that this is
their position in refusing to testify before the Committee.
Even more frustrating and outrageous is the refusal of the
plaintiff attorneys themselves to testify. They've been asked to
provide this Committee with a copy of their secret contingency
agreement and other information used to justify their fee claim. They
refused this request last year. And when asked again this year they
again refused. So what did they do? They hired attorneys to represent
them.
Lawyers signing secret agreements to enrich themselves at the
expense of individual Indians.
Lawyers hiring lawyers instead of being open and transparent.
This is why H.R. 887 was introduced, its why this hearing is
necessary and its why further action by the Committee should be
expected.
Again, I thank and commend Chairman Young for convening this
hearing. I look forward to hearing the views of today's witnesses on
this issue.
______
Mr. Young. I thank the Chairman. We only have two witnesses
today. They are Patricia Douville, and I believe she represents
the Rosebud Sioux Tribe; and Professor Richard Monette, of the
University of Wisconsin-Madison School of Law, an IIM Account
Holder and a former Tribal Chairman. Welcome.
Like all our witnesses, your written testimony will appear
in full in the hearing record. I also ask you to keep your oral
statements to five minutes as outlined in your invitation
letter from the Committee, and under Rule 4[a].
Our microphones are not automatic, and so please press the
button when you are ready to begin. I would like to explain the
timing lights. When you begin to speak, our clerk will start
the timer, and a green light will appear. After four minutes, a
yellow light will appear, and at that time you will begin to
conclude your statement.
And at five minutes the red light will come on, and you may
complete your sentence, but at that time I must ask you to
please stop. So, with that, I will call on Patricia first.
Please, Madam, you are on.
STATEMENT OF PATRICIA DOUVILLE, COUNCIL REPRESENTATIVE, ROSEBUD
SIOUX TRIBE, ON BEHALF OF RODNEY M. BORDEAUX. PRESIDENT,
ROSEBUD SIOUX TRIBE, SOUTH DAKOTA
Ms. Douville. Good morning, Mr. Chairman, and Committee
Members. On behalf of the Rosebud Sioux Tribe, the Sicangu
Lakota Oyate, I would like to thank you and the Committee for
convening this hearing to direct the Secretary of the Interior
to submit a report on Indian land fractionation, and for other
purposes.
My name is Patricia Douville, and I am a member of the
Tribal Council of the Rosebud Sioux Tribe, and an testifying
today in that capacity.
Although now considered a single Indian tribe, the Rosebud
Sioux Indian Reservation is historically a confederation of
seven Bands and Sub-Bands from all over the Midwest, and
central, and southern Canada. The present-day Rosebud
Reservation is located in south-central South Dakota, and was
established by the authority of the 1868 Great Fort Laramie
Treaty.
The Indian Reorganization Act of June 18, 1934, also known
as the Wheeler-Howard Act, or informally, the Indian New Deal,
was a United States Federal legislation which secured certain
rights to Native Americans, including Alaska Natives.
These include activities that contributed to the reversal
of the Dawes Act's privatization of common holdings of American
Indians and a return to local self-government on a Tribal
basis.
The Act also restored to Native Americans the management of
their assets, being mainly land, and included provisions
intended to create a sound economic foundation for the
inhabitants of Indian reservations.
Section 18 of the IRA conditions application, or
membership, of the IRA on a majority vote of the affected
Indian Nation or Tribe within one year of the effective date of
the Act, 25 United States Code 478. The IRA was the initiative
of John Collier, Senior, Commissioner of the Bureau of Indian
Affairs from 1933 to 1945.
The Rosebud Sioux Indian Reservation ratified the IRA on
June 18, 1935, and now called itself the Rosebud Sioux Tribe.
Subsequently, on April 7, 1943, the Rosebud Sioux Tribe formed
Tribal Land Enterprise, TLE, under the authority of the Act to
actively pursue and purchase tribal-allotted lands that would
have traditionally been lost by the Patent-Fee process.
TLE historically becomes one of the first tribally owned
and operated land consolidation programs in the United States.
Since 1943, TLE now has in its control over 800,000-plus acres.
These acres are used by the Tribe for agricultural, economic
development, and of course, Tribal member residential use.
The Rosebud Sioux Tribe has proven to the Department of the
Interior and the Bureau of Indian Affairs that Tribes have the
capability, the knowledge, and the foresight to control the
destiny of its tribal lands. After all, isn't it true that we
Native Americans and Alaskan Natives should know what is in our
best interests?
The Cobell Settlement brings forth many questions to me, my
Tribe, and those Tribes who were affected by the failure of the
Bureau of Indian Affairs to properly provide trust management
of our individual allotted Tribal members.
Mr. Chairman, what is paramount in Indian Country today
with this settlement is the following. Cap the lawyer fees to
$50 million. Second, ensure that the Tribes who were wronged by
the Department of the Interior and the Bureau of Indian Affairs
are properly and justly provided with the settlement funds for
repurchasing of fractionated or restricted lands.
What worries me, Mr. Chairman, is the problem of the BIA
administering these repurchasing funds with a time limit that
is stipulated within the settlement agreement to a period of 10
years.
Mr. Chairman, is it peculiar that those who violated the
trust responsibility that put this Federal Government in a
lawsuit, which it lost, is again in control of these dollars?
Mr. Chairman, if this Committee has the authority to act
and make recommendations, then please consider that Tribes also
lost lands to the Homestead Act, which some would argue
violated our great treaties.
The allowance for tribes to purchase fee lands within their
original boundaries with these settlement dollars would help
correct historic injustices. Thank you.
[The prepared statement of Mr. Bordeaux follows:]
Statement submitted for the record by Mr. Rodney M. Bordeaux,
President, Rosebud Sioux Tribe (As given by Ms. Patricia Douville,
Council Member of the Rosebud Sioux Tribe)
Good morning Chairman Doc Hastings and Committee members. On behalf
of the Rosebud Sioux Tribe, the Sicangu Lakota Oyate, I would like to
thank you and the committee for convening this hearing to direct the
Secretary of the Interior to submit a report on Indian land
fractionation, and for other purposes. My name is Patricia Douville and
I am a member of the Tribal Council of the Rosebud Sioux Tribe and am
testifying today in that capacity.
Although now considered a single Indian tribe, the Rosebud Sioux
Indian Reservation, is historically a confederation of 7 bands and sub-
bands from all over the mid-west and central and southern Canada. The
present-day Rosebud Reservation is located in South-Central South
Dakota and was established by the authority of the 1868 Great Fort
Laramie Treaty.
The Indian Reorganization Act of June 18, 1934, also known as the
Wheeler-Howard Act or informally, the Indian New Deal, was a U.S.
federal legislation which secured certain rights to Native Americans,
including Alaska Natives. These include activities that contributed to
the reversal of the Dawes Act's privatization of common holdings of
American Indians and a return to local self-government on a tribal
basis. The Act also restored to Native Americans the management of
their assets, being mainly land, and included provisions intended to
create a sound economic foundation for the inhabitants of Indian
reservations. Section 18 of the IRA conditions application, or
membership, of the IRA on a majority vote of the affected Indian nation
or tribe within one year of the effective date of the act (25 U.S.C.
478). The IRA was the initiative of John Collier Sr., Commissioner of
the Bureau of Indian Affairs from 1933 to 1945.
The Rosebud Sioux Indian Reservation ratified the IRA on June 18,
1935 and now called itself the Rosebud Sioux Tribe. Sub sequentially,
on April 07, 1943, the Rosebud Sioux Tribe forms Tribal Land Enterprise
(TLE) under the authority of the act to actively pursue and purchase
tribal allotted lands that would have traditionally been lost by the
Patent-Fee process.
TLE historically becomes one of the first tribally owned and
operated land consolidation programs in the United States. Since 1943
TLE now has in its control over 800,000 plus acres. These acres are
used by the tribe for agricultural, economic development, and of
course, tribal member residential use.
The Rosebud Sioux Tribe has proven to the Department of Interior
and the Bureau of Indian Affairs that tribes have the capability, the
knowledge and the foresight to control the destiny of its tribal lands.
After all, isn't it true that we Native Americans and Alaskan Natives
should know what is in our best interest?
The Cobell Settlement brings forth many questions to me, my tribe,
and those tribes who were affected by the failure of the Bureau of
Indian Affairs to properly provide ``trust management'' of our
individual allotted tribal members.
Chairman Hasting what is paramount in ``Indian Country'' today,
with this settlement, is the following; cap the lawyer fees to 50
million dollars, secondly, ensure that the tribes whom were wronged by
the Department of Interior and the Bureau of Indian Affairs are
properly and justly provided with the settle funds for repurchasing of
fractionated or restricted lands.
What worries me, Mr. Chairman, is the problem of the BIA
administering these repurchasing funds with a time limit that is
stipulated within the settlement agreement to a period of ten years.
Mr. Chairman is it peculiar that those who violated the trust
responsibility that put this federal government in a lawsuit, which it
lost, is again in control of these dollars?
Mr. Chairman if this committee has the authority to act and make
recommendations then please consider that tribes also lost lands due to
the Homestead Acts which some would argue violated our great treaties.
The allowance for tribes to purchase fee lands, within their original
boundaries, with these settlement dollars would help correct historic
injustices. Thank you.
______
Mr. Young. Thank you, Lady, for your fine testimony.
Richard, you are up.
STATEMENT BY PROFESSOR RICHARD MONETTE, UNIVERSITY OF
WISCONSIN-MADISON SCHOOL OF LAW, FORMER TRIBAL CHAIRMAN AND
CURRENT IIM ACCOUNT HOLDER
Mr. Monette. Good morning, Chairman Hastings, Chairman
Young, Ranking Member Boren, and Members of the Committee, I am
also honored to be on the panel with the Rosebud Sioux Tribal
Leader.
Mr. Chairman, Ms. Cobell and the attorneys told us all that
they would keep the class informed through a website. In fact,
the court once noted--and I will quote: ``The Plaintiffs
generally have utilized their website as the primary means to
communicate with class members.''
Well, more specifically, Mr. Chairman, on November 5, 1998,
the judge struck from the complaint all of the claims that had
to do with money, and we talked about this being potentially a
$17 billion case.
One of the reasons that it went from $17 billion down to a
much lower amount is because in 1998, in November, the judge
struck from the complaint all of the claims that had to do with
money, and he made it clear that the only claims that would
survive were those that were about accounting.
And then he ordered, quote, ``that the Plaintiffs within
five days of this order shall post on the front page of
Plaintiffs' website, in a conspicuous manner, a notice to the
class.''
However, in that very month, and months to follow, the
website simply stated, and I brought a copy here if you would
like to see it from November of 1998, there are no records to
display for this month.
The single biggest event in the history of this litigation,
and they didn't tell the class. That was a common practice. In
fact, it is fair to say that we were outright lied to all
along.
I will say that the Christian Science Monitor wrote in an
article in 2002, and they were quoting Ms. Cobell, and she said
that ``one of the persistent rumors I always hear is that I am
somehow going to make millions of dollars in reward money for
taking on the lawsuit,'' she said, shaking her head. And then
she said, quote, ``I stand to gain no more than any other trust
fund recipient.'' Well, today, we know that Ms. Cobell stands
to gain well over $2 million from the settlement, while the
vast majority of class members will receive less than $2,000.
She lied.
The Federal Court once wrote that it has been observed that
by moving for class certification, the class representative
and, in this case Ms. Cobell, has voluntarily taken on a court-
imposed fiduciary responsibility.
Evidently, Ms. Cobell does not feel that that obligation
applies to her. It is safe to say that we all felt duped.
Former Senator Dorgan has said that he is incensed at the
amount of the request. He has intimated that Congress would not
have passed it if he had known.
In a separate petition for attorneys' fees filed recently
by the Native American Rights Fund (NARF), here is what they
wrote. This is the Native American Rights Fund, who started
this lawsuit. ``Unlike the other attorneys who have petitioned
the court for fees in this case, NARF is not seeking a premium,
a bonus, or a fee multiplier.'' So I guess now we know even
what NARF thinks about the attorney request.
If Members of Congress who moved the settlement, and NARF,
which brought the suit, feel deceived, imagine why we, the IIM
account holders, feel deceived about this lawsuit. There is a
growing sentiment out there, in fact, that the request for $223
million in legal feels is designed to make a $99 million
settlement look reasonable. Even $50 million is not reasonable.
Lawyers take contingency fee cases all the time. They jump
at the chance to win big. They run the risk of winning nothing.
That is what happened in this case. They won nothing.
The trial court ordered $455 million, and that an
accounting could not be done. The appeals court said that an
accounting could be done, and they vacated the $455 million.
That is where we stand with this case, zero dollars on the
table.
They filed an intent to appeal with the United States
Supreme Court, and then thinking that they were going to lose
in front of a Republican-controlled court as they said, they
withdrew their appeal.
And so we stand now with an appeals court opinion that says
that they won nothing but an accounting. Ironically, maybe that
was a win for some of us IIM account holders, because that is
what we wanted, an accounting.
But when all they could receive was an accounting, there
was no money in that for lawyers. So, very clearly, they went
then and began to talk to this body, to the Department, and
conjured up a lawsuit and a settlement so they could get paid a
lot of money, and the rest of us very, very little. Thank you.
[The prepared statement of Mr. Monette follows:]
Statement of Richard Monette, Associate Professor of Law,
University of Wisconsin, Madison, Wisconsin
Good morning Chairman Hastings and Chairman Young, and members of
the Committee. My name is Richard Monette and I am an Associate
Professor of Law at the University of Wisconsin in Madison. I am an
enrolled member and former Tribal Chairman of the Turtle Mountain Band
of Chippewa, and an IIM account holder. I was invited to present my
views on the attorney's fees portion of H.R. 887, specifically on the
adequacy of the Plaintiff attorney's relationship with the unnamed
members of the Plaintiff class, so I will limit my comments to those
matters.
A sentiment is growing that Plaintiff attorneys' request for 223
million dollars in legal fees is designed to make a 99 million dollar
request appear reasonable. Mr. Chairman, even 50 million dollars in
attorney fees in this case is not reasonable.
Lawyers take cases on contingency fee bases all the time. They jump
at the chance to win big. They run the risk of winning nothing. The
latter is what occurred in the Cobell case.
As a factual matter, after nearly thirteen years Plaintiffs finally
got a judgment from the Trial Court for 455 million dollars and a
ruling that an accounting could not be done. However, the Trial Court's
decision was appealed, and the Court of Appeals vacated, set aside the
455 million dollar award and ruled that an accounting could be done.
Ironically, Mr. Chairman, the ruling from the Court of Appeals could be
considered a win, since an accounting is what the IIM account holders
actually wanted--no money, but an accounting. ELOISE PEPION COBELL, et
al., Plaintiffs, v. BRUCE BABBITT, Secretary of the Interior, et al.,
Defendants, 30 F. Supp. 2d 24, 39 (D.C. D.C.)(``The plaintiffs have
repeatedly and expressly stated that their Complaint does not seek an
additional infusion of money or other damages for other losses, but
rather requests only an accounting.'') The problem with that, to some,
was the Court of Appeals' decision didn't put any money in the hands of
the attorneys. By the way, it certainly didn't put any money in the
hands of Class Representatives, since the Department of the Interior
has stated publicly that it had in fact conducted an accounting of the
IIM accounts for Ms. Cobell and named Class Representatives and found a
variance of less than one hundred dollars.
At that juncture, Plaintiffs filed an intent to appeal with the US
Supreme Court. However, apparently thinking they would lose, they never
did complete the appeal. Rather they withdrew their intent to appeal
and decided to take the route of colluding with the Department of the
Interior, deceiving this Congress into creating a new Class of
Plaintiffs and new claims that were never litigated, and then awarding
millions to the lawyers who had thus far lost the case. To add insult
to injury, a deal was offered for over seven billion dollars, but
Plaintiff attorneys summarily turned it down, doing more to protect
their own interests than those of the Individual Indian Account holders
they represented. Frankly, they should get nothing.
Mr. Chairman, it's safe to say we all were duped. Former Senator
Dorgan has said he is incensed at the amount of the request. In a
separate petition for attorney fees, the Native American Rights Fund
writes: ``Unlike the other attorneys who have petitioned the Court for
fees in this case, NARF is not seeking a premium, bonus, or fee
multiplier.'' Is it still a surprise that the thousands of unnamed
Plaintiffs also now feel duped as well?
In a Legal Times blog on December 18, 2010 Plaintiff Attorney Keith
Harper tells the reporter that the attorneys have in fact agreed to
limit their fee claim. The sophisticated minds at the Blog understood
them to be saying exactly that. If a legal publication understood the
attorneys' to have agreed to limit their fees, then surely the average
IIM beneficiary could not be faulted for getting the same
understanding. And if the Blog (and other news media got it so wrong,
wasn't it incumbent upon the Cobell attorneys to correct this mis-
impression for the benefit of their clients? Class counsel have a high
duty to the Class Members. These duties include loyalty, the avoidance
of self-dealing, and truthfulness in representations to the Class.
Having just litigated a case relating to the fiduciary duties of a
Trustee, the attorneys were well acquainted with the fiduciary duties
owed the Class. How can Class Counsel reconcile their actions relating
to attorney fees with their duties to the Class? Should the inference
of that bad intent be made?
Class Counsel assert in their fee petition that they had a written
agreement with Class Representatives that they would recover a
contingency fee of 14 percent of all funds provided under the
settlement. If they had such an agreement and intended to use it to
justify a fee greater than $100 million, didn't they have a duty to
reveal this to the Class? Didn't they have a duty to reveal this to
Congress? The inference of improper behavior is further supported by
statements made by Dennis Gingold after a Senator raised the
possibility of limiting the amount authorized for attorney fees. Mr.
Gingold told the press, and hence the Class, that ``any change'' to the
settlement would render it null and void.'' If the settlement is really
good for the beneficiaries, how can an attorney who has a fiduciary
duty to the Class, threaten to scuttle the entire deal if his fees are
limited to a mere $50 million? And how is it that the huge changes he
is now requesting do not render it null and void?
Thus, Mr. Gingold and Mr. Harper were not telling the truth to the
press, to Congress, and to the Class to which he owed a fiduciary duty
when they said they would request fees between 50 million dollars and
100 million dollars, and they evidently flat out lied to us all when
they said that changing the deal would render it null and void. We can
never know how the truth might have changed the course of events. Would
Congress have approved the deal knowing the attorneys would seek $223
million? Would beneficiaries have been more vocal with Congress if they
did not fear that the attorneys would scuttle the case if fees were
limited? What we do know is this: there is no reason the deal cannot be
modified if the parties want it modified. What we do know is that
Congress has a special duty to Indians and that it can protect them
from the rapacious greed of counsel who have failed to be straight with
their clients.
The average members of the Class have been lied to all along. In
the Christian Science Monitor Ms. Cobell was quoted as saying, ``One of
the persistent rumors I always hear is that I'm going to somehow
collect millions of dollars in reward money for taking on the
lawsuit,'' she says, shaking her head. ``I stand to gain no more than
any other trust fund recipient. . ..'' Christian Science Monitor, ``A
Blackfeet's Crusade to settle accounts with US'' March 20, 2002 (by
Todd Wilkinson) Today she stands to gain well over two million dollars,
while the vast majority of class members will receive less than two
thousand dollars. ``It has been observed that by moving for class
certification..., the class representative has voluntarily taken on a
court imposed, fiduciary responsibility.'' v. Pennsylvania Department
of Corrections, 876 F. Supp. 3. 1437, 1457 (E.D. Pa. 1995). Evidently,
that obligation does not apply to Elouise Cobell.
Ms. Cobell and her attorneys stated they would keep the Class
informed through its website. However, in the period following the
judge's order striking all money claims from the lawsuit and making
simply an accounting lawsuit, the website simply stated: ``Nothing to
report''. We now know why.
______
Mr. Young. I was going to let you keep going. That sounded
kind of interesting to me.
Mr. Monette. I have lots to go on.
Mr. Young. And you can digress again as you go through this
process. Thanks to both witnesses for the testimony that you
have had. I am really interested in this, because as I said, I
started this 17 years ago with that group that you talked
about.
And we really believed that it was more than $17 billion,
and that the judge messed that up a little bit, but to have a
settlement, and then have that money taken away, and have the
Plaintiff have $2 million as you said, that is very interesting
to me. So we will continue on that.
Do you have a statement, young lady? You said it has been a
tough day already, and we are not even up to eleven o'clock, or
11:30.
Mrs. Noem. Well, I have just been behind schedule today. I
was over on the Senate side.
Mr. Young. Oh, that is a dark place. Don't ever go to the
dark place.
Mrs. Noem. I know, but I would appreciate the honor of
introducing Patricia, who is from South Dakota, and if you
would allow me that leeway, Mr. Chairman, that would be great.
So, thank you, and it is my great honor to introduce
Patricia Douville, Council Representative of the Rosebud Sioux
Tribe of South Dakota, my home. Patricia was born and raised on
the Rosebud Indian Reservation, and represents the Ring Thunder
Community.
I had the pleasure of meeting with Patty over the last few
months, and it has been wonderful to hear from her first-hand
some of the successes, as well as the concerns, of the Rosebud
Sioux.
So thank you for coming to testify today, Patty, I
appreciate that. It is wonderful to see you again, and I know
that you have already given us your statement, and I thank you
for that, and I look forward to working with you again in the
future. Thank you, Mr. Chairman.
Mr. Young. Thank you, Lady, and Mr. Boren, you have some
questions?
Mr. Boren. I have a few questions, Mr. Chairman. There is
always a South Dakota connection, and as I mentioned to Mrs.
Noem, my wife is from Aberdeen, South Dakota, and so there is
always somehow where we are connected to South Dakota.
Let me start out by saying that the court has issued a
stay, and so the reason why the witness list here is a little
bit thin is because there are a lot of people who may want to
talk, and who may want to share their opinions, but they are
bound by the court decision that they can't share their
thoughts with us.
And I want to go to Mr. Monette here just quickly. You
know, you are a law professor. How do you feel about Congress
ejecting itself in active litigation? Does this implicate
separation of powers and due process principles? Do you have
any pause there when Congress tries to interject itself in the
middle?
Mr. Monette. I think it is fair to say that I normally
would have pause, but Congress has set the threshold for this
settlement, and I think the fact that Congress maintains its
jurisdiction in doing so.
Mr. Boren. So in any other case, because this is the Cobell
case, you would say that the Congress should not interject
itself? I mean, this is special because it affects you, or
because--what is the----
Mr. Monette. I will be in court making the argument that
Congress has already injected itself. Congress waived the rules
of civil procedure, the Federal rules, yet said that they would
waive them so that the court could certify the second class,
the Trust Administration Class, which had never been presented
to the court.
The class had not been certified, and it could not be
certified because there is no commonality or typicality among
the members. And Congress invoked its Article I powers to
create that jurisdiction under the Court's Article III powers.
We have some pretty clear arguments in our court that that is
inappropriate.
In fact, there is a recent quote from Justice Scalia, and
in fact quoting another case from before, talking about, and I
will quote, ``the astounding principle that Congress can invoke
its Article I powers to expand or contract the Court's Article
III powers.''
That is what the Congress did in this settlement in the
first place. It expanded the Court's Article III powers in a
way that the Court could not have done on its own. It did not
and could not have had that case or controversy in front of it.
That is why on November 5, 1998, that is why the case went
from $17 billion down to a much lower amount, because the Court
had to extract all those monetary claims because it knew that
it did not have the jurisdiction.
And it was not just because Congress had not waived its
immunity. It is because the Court had not certified a class,
and I said that earlier. If the Court thinks that it can
certify this class, and if Congress thinks that it can, then
make the court do it.
Then come back and settle that if you want, but let us
first see if the court can exercise its Article III
jurisdiction and certify that class, and it could not.
Mr. Boren. OK. So as a legal scholar would you agree that
the Court does have discretion to award a greater or lesser
amount to class counsel in suits such as these? Do they have
that authority?
Mr. Monette. Generally the judge has discretion. Now, we
have a long history in Indian Country of limiting attorneys'
fees in land claims to 10 percent of the claim, and there have
been a lot of lawyers that got very wealthy off of that in the
last 70 or 80 years, and that should be followed here.
Based on what DOJ said they actually won--I mean, we can
hear about 14 years of litigation, but the fact of the matter
is that they lost that. Then we had six months of negotiation.
$223 million is a pretty good deal for six months of
negotiating behind closed doors.
What they should get is what they won, 10 percent of $360
million, tops, and nothing beyond that.
Mr. Boren. OK. I may have some further questions, but I am
going to yield back right now. I am going to yield back.
Mr. Young. I thank the gentleman. Mr. Labrador.
Mr. Labrador. Mr. Chairman, I just have a statement from a
citizen of the Nez Perce Tribe, and I just want to ask for
unanimous consent to insert it into the record.
Mr. Young. Without objection, so ordered.
Mr. Labrador. And I yield back to the Chairman.
[A letter from Gary Dorr, Citizen of the Nez Perce Tribe,
submitted for the record by Congressman Raul R. Labrador (R.-
ID), follows:]
Gary Dorr
Citizen of the Nez Perce Tribe
Enrollment No. 2528
P.O. Box 202
Worley, ID 93976
The Honorable Don Young
United States House of Representatives
Chairman, Subcommittee on Indian and Alaska Native Affairs
Washington, D.C. 20515
Dear Mr. Chairman:
I strongly support H.R. 887, Section 2. I am a Citizen of the Nez
Perce Tribe, IIM Account holder, and an owner of farm land held in
trust on the Nez Perce Indian Reservation. Many of the Indians in the
Pacific Northwest who are in possession of trust land being leased by
Commodity farmers have not been adequately represented by the Cobell
Legal team inasmuch as the settlement will not fairly compensate all
Indian land owners equally. The Cobell Legal team did not take into
consideration the most basic of all land leasing concepts used with
regularity by the Pacific Northwest Indian Land Owners. As stipulated
in 25 CFR 162.227, Indians have always been allowed to negotiate direct
pay from their lessors. Pacific Northwest Indian lessees utilize this
form of payment for grain or other commodity crops. This process means
that the farmers pay the Indian Land Owners Directly in lieu of
directing payment through the Bureau of Indian Affairs or Office of
Special Trustee by way of the Individual Indian Money Accounts (IIM
Accounts).
As it stands now, the Cobell Settlement will pay for an Historical
Accounting Class and for Trust Administration Class. As I understand
it, any Indian who has had an IIM Account is part of the Historical
class. Any Indian who had money passing through the IIM Account will
receive five hundred dollars or more depending on how much money passed
through the IIM Account as part of the Trust Administration Class. If
my sister who lives in California elected to receive her crop payments
from our Nez Perce Reservation land through her IIM Account, which
would have been legal, and I elected to receive Direct Payment from the
farmer on our land on the same lease, then under the Cobell Trust
Administration payment schedule my sister will stand to gain more than
I would for the same piece of land, for the same mismanagement, for the
same historical background on the land handed down to us from our
ancestors. This payment schedule as stipulated under the Trust
Administration Class portends to create even more mismanagement of
funds rightfully gained by Indian Land Owners a situation which should
have been more than evident when this esteemed group of legal
professionals undertook representing all Indian Land Owners without
their consent.
Secondly, the Historical Accounting Class will also unfairly award
some Indian IIM Account holders. That an Indian held an IIM Account is
not merely an acceptable reason to receive a payment for the Cobell
Settlement. The reason is rather simple. Not all Indians receive money
through their IIM Accounts for leasing or land use. We have multiple
thousands of Indian children who receive Tribal per capita payments
which are held in their IIM Accounts and are released when they turn 18
years of age. Many of these children are in receipt of their Tribe's
Casino per capita payments. There is no other reason some Indian
Children have or had an IIM Account between October 25, 1994 and
September 30, 2009 other than they are or were receiving Tribal per
capita payments. There was no mismanagement of trust assets in many of
these incidents because not every Indian is a land owner. Many of these
accounts can be reviewed by the Tribe and the Individual Indians to see
that, given the relatively short time frame and miniscule number of per
capita payments, this particular group of Indians has been paid exactly
what was deposited and owed to them. Yet, as part of this Cobell
Settlement, they will be receiving one thousand dollars for a mistaken
belief that they have had trust assets mismanaged. Again, the apparent
lack of understanding on the part of the Cobell legal team has led to
what will once again result in further mismanagement and depletion of
funds due to Indian Land Owners.
I feel that based on these two strikingly obvious mistakes and a
litany of additional mistakes as articulated by Richard Monette and
others, that the Cobell Legal Team has not represented the best
interest of all Land Owners. In light of the fact that now we will not
be able to come back and resolve this after this settlement unless we
opt out of our respective classes, I strongly support this
Subcommittee's actions to take effective and resolute action to limit
the payment given to the Cobell Legal Team to 50 million dollars. We
Individual Indians have been put between a rock and a hard place and
there is no recourse of going back as a result of the manner in which
the Cobell Legal Team has ramrodded this shoddy settlement through the
courts supposedly on behalf of all Indians.
The Cobell Legal Team now claims to have represented us without our
consent and sought to represent all of us without consulting with the
most learned of all Indians, the Individual Land Owners. This group of
Individual Land Owners is now beset with a terrible struggle to gain
effective legal representation on our own if we opt out because many of
our lawyers will be representing Tribes, which is a different class
altogether.
This situation of further mismanagement of Individual Indian Assets
created by the Cobell Legal Team is regrettable, unacceptable, and must
not be rewarded with funds which will be withdrawn from the very class
of people being represented. I strongly support the limitation of
payment to the Cobell Legal Team to 50 million dollars. I know of other
Indians who also support limiting payment to the Cobell Legal Team and
oppose the entire Cobell Settlement, but have neither the means nor the
support of their elected leaders who are representative of a different
class to gain any significant momentum to oppose the entire Cobell
Settlement.
I thank you and the other members of Congress for your time to
consider the plight of an Individual Indian Land Owner in this grave
situation, and I hope for adequate relief from further mismanagement of
Individual Trust Assets, which would be further amplified if the Cobell
Legal Team received more than 50 million dollars.
Sincerely,
Gary Dorr,
Citizen of the Nez Perce Tribe
Enrollment Number 2528
______
Mr. Young. Mr. Kildee.
Mr. Kildee. Thank you, Mr. Chairman, and thank you for
having this hearing. I am not an attorney, which is sometimes
an advantage and sometimes a disadvantage. But I think all of
us at this table have purity of intention, and we want to do
what is just and what is right.
I have some concerns about opening the case up in some way
and maybe putting something in jeopardy, and so I am going to
be very cautious on that. But I do recognize that everyone up
here has a record and a background that shows the purity of
intention. But sometimes I look at unforeseen consequences and
I want to be very careful with that, and with that, I will
yield back the balance of my time, Mr. Chairman.
Mr. Young. Ms. Noem.
Mrs. Noem. Thank you, Mr. Chairman. I have a question for
Ms. Douville. Thank you for your testimony. It highlighted an
important issue that the Cobell Settlement brings to light,
which is that the Bureau of Indian Affairs has not measured up
to its trust management responsibilities.
So what suggestions do you have for BIA to further and to
better fulfill their responsibilities?
Ms. Douville. What I believe is that the Department needs
to get the Tribes, the Native Americans, involved in all the
decision making for a true government-to-government
consultation, so we can be equal partners sitting at the table,
and making decisions. As I have stated before, we are capable
and knowledgeable of doing for ourselves.
Mrs. Noem. OK. A follow-up question. Could you tell me a
little bit about the Tribal Land Enterprise, or the TLE, and
how those lands are used? Specifically, how they benefit the
Tribes.
Ms. Douville. OK. Well, it is obvious that we know how to
best manage our lands, and the government should not be getting
in our way of allowing the lands to be used by the Tribes as we
see fit is the best for us, but in accordance with our
treaties. We know how to develop and we know what we need, but
the government has to remember that they do have trust
responsibilities to us.
Mrs. Noem. Is there anything that is preventing the Tribe
from using land consolidation funding to buy fee lands within
the boundaries of the reservation?
Ms. Douville. Well, with this settlement, yes, there is. It
states in the settlement that only fractionated or restricted
lands could be purchased with this. But what we would like to
see is that fee lands would be able to be purchased with those
monies also.
Mrs. Noem. OK. Thank you for that clarification. I
appreciate it. I yield back the balance of my time, Mr.
Chairman. Thank you.
Mr. Young. You guys are short today. Mr. Lujan.
Mr. Lujan. Mr. Chairman, thank you very much, and I would
very much agree with the sentiments that were shared by Mr.
Kildee as well, and making sure that in the end, I think that
we all share the same goals.
As far as making sure that we are able to provide some
resolution to the many years that many of our Tribal brothers
and sisters very clearly were discriminated against, and as we
talk about how this funding should have gone to many people,
and it didn't.
And in the end, I hope that is what we are able to
concentrate on, and I would ask Ms. Douville and Mr. Monette if
you would agree with that?
Mr. Monette. Very much.
Ms. Douville. Yes.
Mr. Lujan. With that being said, Mr. Chairman, learning
from the last hearing, I will make sure that I submit some of
my comments into the record as well. But a question that I have
for Mr. Monette is that in your written testimony, you state
that there is no reason that the settlement cannot be modified
if the parties want it modified.
Being that there is a settlement that was put forth for
approval before Congress, doesn't that indicate that the
parties to this settlement have already agreed to the
stipulations of the settlement?
And if they don't want it modified, how would that impact
it?
Mr. Monette. Well, I guess some of it is to put all of that
in context. I think that it is fair to say that what I said
earlier is that this settlement can be modified by this body
for sure.
And as I made my point, I hope earlier would not be a
violation of any separation of powers at all. But we had
witnesses from the Cobell camp testifying here, as well as in
the newspapers, saying that when in the first instance the
Chairman of this Committee, and including the Member on the
dark side, on the other side of the Hill, also proposed to
limit the attorneys' fees, the attorneys for Cobell said that
any modification would render the settlement null and void, and
that there could be no changes.
And when he said that, what was on the table at the most
was an agreement that they told all of the class members, and
told all of you, that they would limit their fees between $50
million and $99 million.
So to me, I mean, if he is asking for $223 million. It
sounds like he wants to render the settlement null and void. So
in the court can it be modified?
Mr. Lujan. But, Mr. Monette, the position that that
individual may have taken, does that fundamentally change the
language associated with the agreement? I guess I am not
following. I don't know that.
Mr. Monette. Well, we unnamed class members, and I
appreciate the opportunity to testify for a lot of them that
don't have the money to pay for million-dollar lawyers, we
unnamed class members are owed huge obligations when a class
settlement is made.
But when a class action is certified, and in fact as I read
earlier, the sort of trust fiduciary responsibility that is
imposed on the class member, the attorneys become the trustee
for the unnamed class members, because they are not at the
table, and they don't know the negotiations that are going on.
The judge becomes a trustee, and the model professional
rules put a very high standard on the judge, as do the Federal
Rules of Civil Procedure, on the judges. Of course, we have a
trustee down the street, and we know where we have been with
that one.
It is unfortunate that where we have been with that one
that we feel like that we have been in the same place with the
rest now.
Mr. Lujan. Mr. Chairman, if I could get back to the
question, which is fundamentally what I think I have heard from
some of the questions is that if you change the settlement
agreement, and if there were amendments that were made,
wouldn't it render the settlement null and void under the terms
of the settlement agreement?
And wouldn't that potentially force parties back to
resuming litigation?
Mr. Monette. If this body does it, I don't think it would.
If you are asking me do I think it would be a good idea to take
them back to the table and make them certify that second class,
and actually litigate the claims, I would prefer that that
occur. Absolutely.
Mr. Lujan. And, Mr. Chairman, the question is that if
changes were made to the settlement, wouldn't that render the
settlement void under the settlement agreement?
Mr. Monette. If we have an understanding that the
contingency fee arrangement that we have not heard about, this
14 percent, was well hidden and is not part of the settlement,
then I can agree.
Mr. Lujan. Let me ask it this way, Mr. Chairman, could it
jeopardize the settlement agreement if it is amended?
Mr. Monette. Yes, and it should.
Mr. Lujan. Thank you, Mr. Chairman. I yield back my time.
Mr. Young. Just for the gentleman's information, what
concerns me the most is that I served on this Committee, and I
have watched this as I said for 17 years. It was my
understanding that the agreement was between $50 million and
$100 million.
And I thought that $100 million was extraordinary. Now, the
Cobell attorneys took a cheap shot at me, and I will not
forgive them for that. They thought that I was the originator
of the bridge to nowhere, and if you really want to get me
pissed off, you just mention that a few times, and that we had
no right to do it.
And we were not aware of this on the Senate side, nor the
House side, and then to disclose that after the fact is I
think--that it does not have anything to do with the agreement.
I really believe that the agreement, if we wish to have it
stand, should stand, and with the understanding of what fees
would be paid. Ten percent is a standard fee, and I have said
that $99 million was awful high, and then to come back with
$223 million, and then have the Plaintiff say this will
jeopardize the settlement, that was not part of the settlement.
It was not on the table, and that is where the frustration
comes from the Chairman and myself. That was uncalled for
because I don't believe that there would have been a settlement
reached even with the Justice Department, if they were aware of
that.
Now, that is what we want to find out, were they aware of
it, and was the Department of the Interior aware of it, and if
they were, we were not aware of it, and we were the ones that
had to pass the law.
And we did that with the understanding that we wanted a
settlement done, and that there would be a payment to the
lawyers of a certain amount, between $50 million and $100
million.
And now we come out and here it is $223 million. That is
where I think that if we were to change the legal fees, how
could it destroy the agreement. I don't understand that. The
good lady from Hawaii. I love being the Chairman. I can talk
all day long, but go ahead.
Ms. Hanabusa. Thank you, Mr. Chairman. Mr. Chairman, and
thank you for the witnesses here, I was not here, and so please
bear with me. I do happen to be an attorney, and Professor
Monette, I am also very familiar with class actions.
One of the things that I am curious about is that in a
class actions case, the fee is usually determined by the court
after a hearing. Has that fee amount been determined yet? My
understanding is that it has not.
Mr. Monette. The fee amount has not been determined yet.
Ms. Hanabusa. And it is also clear from what has been
presented that there was some agreement that it would be
between $50 million and $100 million, and it seems like the
Class Plaintiffs' attorneys, have requested $223 million. Am I
understanding that correctly?
Mr. Monette. They said that is what they deserve in the
case, and to the court.
Ms. Hanabusa. But have they requested $223 million from the
court, or is it----
Mr. Monette. They did not request anything beyond that
statement, and so it sounds like their request.
Ms. Hanabusa. So we really don't know at this point in time
whether they are going to breach the $50 million to $100
million by going in for $223 million. Would that be a correct
statement?
Mr. Monette. We don't know that they are going to get any
more than the hundred-million. Well, right now we don't. That
is still to be determined.
Ms. Hanabusa. So it would seem to me that it would be
proper for Congress to take the position that what Congress'
understanding was as to the fee structure, but it seems like
there may have been an understanding of somewhere between 50
and a hundred, but not the $223 million, which they may
request, which they have not done at this point in time. Do you
agree with me?
Mr. Monette. I would agree that Congress seems to have
authorized between 50 and a hundred-million.
Ms. Hanabusa. But not anything more than that?
Mr. Monette. But not anything more.
Ms. Hanabusa. And that would be something that I would
assume that the Court, in making an understanding and
determination as to what the fee structure should be, that they
would take into consideration what Congress' understanding was.
So wouldn't you agree with me on that?
Mr. Monette. One would hope. Yes, I would agree with you on
that.
Ms. Hanabusa. Thank you. Now, Ms. Douville, one of the
things that I am interested in here in reading what has
happened is this concept of fractionation, and how it would
come to that.
The BIA actually is authorized to do that within 10 years,
and your concerns are very valid, but what I am also concerned
about is that as these lands are purchased--and I think in your
testimony, you said in fee. Were they intended to purchased in
fee, and become part of Indian Country at that point?
Ms. Douville. Yes. Right now the fee lands that we have on
our reservations, we purchased that on our own, and we would
like to see this money be used also to be able to purchase
those, because in the settlement, it does say that only
fractionated or restricted lands can be purchased with this.
Ms. Hanabusa. So that is the $1.9 million portion of the
settlement?
Ms. Douville. No, $1.9 billion, yes.
Ms. Hanabusa. Yes, $1.9 billion. The thing that I am
curious about is that my understanding is that Indian Country
is held basically in trust.
Ms. Douville. Yes.
Ms. Hanabusa. So the concept of purchasing it in fee, and
then it would then become part of Indian Country. So it would
then be held in trust for--would it be a Tribal entity?
Ms. Douville. For the reservation.
Ms. Hanabusa. For the reservation itself?
Ms. Douville. Yes.
Ms. Hanabusa. And that would of course then protect any of
that purchase from being taxed by any other governmental
entity?
Ms. Douville. Yes, it would be non-taxable.
Ms. Hanabusa. Yes, and that was my concern. When I saw the
purchase and fee, I wanted to be clear that the purchase and
fee would result with no tax.
Ms. Douville. Yes.
Ms. Hanabusa. Thank you. And you, of course, also object to
any of the monies--and I assume that is because you view it as
taking away from the purchasing of the land if the attorneys
walked off with this unconscionable amount of money?
Ms. Douville. That is just an outrageous amount of money to
be taking for what little they have done basically.
Ms. Hanabusa. And you are a class member?
Ms. Douville. I am an IIM account holder, yes.
Ms. Hanabusa. And you would, of course, object at any
proceeding that the court may hold on the issue of attorneys'
fees?
Ms. Hanabusa. I object to the attorneys' fees even being at
$50 million right now.
Ms. Hanabusa. I understand that, but it seems like Congress
may have approved somewhere between $50 million and $100
million.
Ms. Douville. Yes.
Ms. Hanabusa. Thank you very much. Thank you, Mr. Chairman.
Mr. Young. Mr. Labrador
Mr. Labrador. Thank you, Mr. Chairman. I just have a few
questions. I am trying to understand the issue a little bit
better. I am new to the Congress, and I was not here when the
settlement was approved.
And it seems like it is one of the few issues where maybe
there is some bipartisan support, and some bipartisan questions
also. So I just want to understand, kind of following up the
good gentle woman from Hawaii's questions. If the attorneys
signed a document that said that we are not going to ask for
anything more than $99 million would you agree to that?
Mr. Monette. I would never agree to that
Mr. Labrador. You would never agree to that?
Mr. Monette. No. Before this body was duped into enabling
that settlement last year, I came here and argued that the
monetary claims had been taken off the table, and if this body
had not put those claims back on the table, we would simply be
talking for an accounting, and the attorneys would be way, way
less than that. Let us talk $1 million or $2 million.
And that is actually what they won. They did not win
anything beyond that. They came here and convinced the
Department and this body that they had done all this work, and
had won things beyond that, and this body authorized a
settlement that had an agreement between $50 million and $100
million.
It never should have done that. I will never agree with
that. Now, if you are asking me a legal question did this body
authorize it?
Mr. Labrador. Yes.
Mr. Monette. It did, and this body should undo that
Mr. Labrador. So that is a different question. So I just
want to understand where you are coming from. Your statement
then is that even if they told you right now that they went to
the court and they said $99 million is the most that we are
going to ask for, you are not in agreement with that, correct?
Mr. Monette. I am not in agreement with that
Mr. Labrador. Patricia, how about you?
Ms. Douville. I don't agree with that at all. For one
thing, if they did the due diligence that they should have,
then the people in my region, in our area, the large land-based
tribes that are going to be affected mostly from this
settlement, did not get any information, and was not even
properly informed as to what this settlement entailed, who was
a class member, or even if there was going to be a monetary
value placed on to it.
I, myself, as an IIM account holder, just got mail,
something in the mail saying do you want to be a class member
or do you not. There was nothing really available to us.
So a lot of the class members, first class members, don't
really understand the settlement, and don't know what it is
really going to do for us.
Mr. Labrador. So, in essence, you are more here to try to
have us invalidate the agreement, and not necessarily argue
about attorneys' fees?
Mr. Monette. I am here asking that the attorneys' fees be
based on what they in fact won. If the agreement stays in
place, fine. Well, I am not fine with that either, but----
Mr. Labrador. Well, that is not what I am asking. So you
want the attorneys' fees to be $1 million or $2 million?
Mr. Monette. I want the attorneys' fees to be based at most
on what all the parties agree that they might have won on the
accounting part of this case, which is the only class that was
certified, and the only claims that were litigated, the only
litigation that was ruled upon by a judge.
Mr. Labrador. Thank you. I have no further questions.
Mr. Young. Mr. Boren.
Mr. Boren. Thank you, Mr. Chairman. I just have--I want to
make some clarifications here. We have a lot of numbers that
are being thrown out. You just mentioned $2 million, and you
just mentioned 10 percent, which is roughly $30 million.
We have a number between $50 million and $99 million. I
think the attorneys actually asked for $99 million, but then in
some of their submissions, they said that it could go up to
$223 million.
And I think that all of these numbers that are floating
around goes back to why we need the judiciary to make this
determination. We have as a Congress said between $50 million
and $99 million.
The thing that I am most worried about is let us say
whatever the number is that they come up with, and I am of the
opinion that it should be lower. But let us say they come up
with a number that not all of us can agree on.
We open this back up again and we are sitting here 20 years
later, and Mr. Kildee, and Mr. Young, and other people who have
been here a long time, have worked on this issue for Indian
Country.
The last thing that I want to see are these account holders
not getting their money, and the people not being served, and a
real accounting not being done. So I think that we have a
hearing in June that is coming up, and some further hearings on
where we might go, and they may come back, and the judge may
come back because it is at his discretion, and be at a lower
number.
So I think that we may be a little bit premature in doing
anything. I think that this hearing is very important, and I
thank the Chairman for having it, but we may be back, let us
say, in July having to revisit this issue, because we may, as
Mr. Kildee said, I think we all have purity of heart. We want
to do what is best for Indian Country and for Tribes.
I am not an attorney, just like Mr. Kildee is not an
attorney, and so I may be wrong in some of my statements, but I
think this is an ongoing fluid process that we will hear more
about in the coming days, and I thank the Chairman for having
this hearing.
Mr. Young. Mr. Gosar.
Dr. Gosar. Professor, you seem to take a strong position
that the Plaintiffs' class action attorneys had a conflict of
interest, and even sold out the class for less money than what
was offered in the settlement, simply to ensure a payment for
the lawyers.
Are there any professional rules of ethics in the legal
profession that prohibit these kinds of dealings? And what
exactly should the class counsel have done under the
circumstances; and last, has a bar complaint been filed, or
should one be filed?
Mr. Monette. I do believe that there are conflicts. The
Federal Rules of Civil Procedure has several provisions that
address the kinds of conflicts that we have here. I think that
it is fair to say that several people are contemplating bar
complaints.
I have been contacted by different people in that regard. I
think to put the matter squarely on the table, if they have
cover in what they have done, it is because of what this body
did.
I mean, it is high time to defer to the judiciary now. Last
year, this body gave the judiciary jurisdiction over a lawsuit
that it didn't have. The Constitution requires a case or
controversy, and with the Trust Administration Class, there was
none.
There was no case or controversy, and they could not bring
it. That is why they had to come here to have this body do it.
So what we get is this body teasing up a settlement to get some
buy-in from Tribal leaders and others, and we get these other
things put on the table, such as scholarships and consolidation
money.
Now, with the Member who is familiar with class action
lawsuits, would then be familiar with reverter clauses in
settlements, in themselves are not a dirty word. Sometimes they
are defensible.
But when a reverter clause is used simply to inflate the
settlement as a means to inflate the attorneys' fees, those
reverter clauses are frowned upon by everybody that I have
read. We have a reverter clause in the settlement.
Now, your DOJ people last year testified that it was not,
and it says that if all the money is not spent in the
consolidation program, it shall return to the Treasury. Now,
the only way that it could be more of a reverter clause is if
it used the word revert instead of return. But it is a reverter
clause in every sense of the word.
And so we get this $2 billion added on to make this look
like a big settlement to justify the inflated attorneys' fees.
That is the classic kind of reverter clause that is frowned
upon by every court in the land.
And so, yes, it is fair to say that there is a conflict. It
is fair to say that perhaps the class members should have known
what was going on all along, and you all had a discussion about
whether you knew, and whether the Department. How about the
client? That might have been nice if we had known what was
going on.
We didn't, and so absolutely I think there is a conflict,
and I think that people will raise those conflicts, and I
wouldn't be surprised to see a bar complaint as well.
Dr. Gosar. And how formally would you put that in place?
Mr. Monette. How formally would I?
Dr. Gosar. How would you formulate that to go into fruition
if that was the case?
Mr. Monette. Well, I appreciate the question, and with all
due respect, if I am the one who is going to do that, I don't
think that this is the appropriate body to say that.
Dr. Gosar. Thank you. Ms. Douville, you take issue with the
BIA's management of Indian Affairs. Many of the Tribes in my
district have told me of the great difficulties with the BIA's
incompetence in delaying an action.
These Tribes ask us for block grant funding so that they
can decide how and when to conduct their operations on their
own lands without a bureaucrat intervening. Do you share these
sentiments?
Ms. Douville. Yes.
Dr. Gosar. Do you have problems with BIA mismanagement?
Ms. Douville. Yes, I do.
Dr. Gosar. Can you specify?
Ms. Douville. What I have a problem with is how we are not
consulted. We are never at the table. We are never invited to
the table, and we as Tribal leaders and Indian people, and
Tribes, we know like I have said, we know what is going on with
us, and we know what is in our best interests.
Dr. Gosar. Do you think the tribes will be more self-
reliant if we used block grants?
Ms. Douville. Yes.
Dr. Gosar. So that would take us down the road instead of
waiting for a bureaucrat to make a decision?
Ms. Douville. Yes, that would help us, but like I have said
before, there are constitutional mandates with our treaties
that the government needs to keep in mind, and that it is the
law of the land. That is part of our constitution, and the BIA
does have trust responsibilities to us.
Dr. Gosar. I understand. Thank you very much.
Mr. Young. Would anybody else from this side like to ask
any more questions? Everybody is quiet? And you are a lawyer? I
would watch you. Anybody on this side?
Ms. Hanabusa. Mr. Monette, I understand, and I hear loud
and clear your frustration. Are you an actual certified--did
you opt in as a class member?
Mr. Monette. I still have my letter sitting on my kitchen
table, but you will recall that in the one class, you passed a
settlement that doesn't allow me to opt in or opt out. I am
stuck.
Ms. Hanabusa. I was not here. I am sorry.
Mr. Monette. OK. So they passed this class that said that
we can't opt out, which may in fact raise some other
Constitutional issues as you may know.
The second class that this body created in order to inflate
the fees, we can opt out.
Ms. Hanabusa. But the first class, if I understand what you
said, is an accounting, right?
Mr. Monette. Right.
Ms. Hanabusa. And you have no objections to that decision,
and that is the proper class as far as you are concerned as I
hear you?
Mr. Monette. I hold three separate IIM accounts, and I
thought after 14 years that I was going to get an accounting.
That is what I wanted.
Ms. Hanabusa. And that is really all that you said that you
wanted in terms of a remedy, was the accounting?
Mr. Monette. That is what all of us thought we were getting
from the people that I have spoken with, and that is what they
wanted. Now, if you want to write a $100,000 check, I will take
that, too, but we wanted an accounting.
Ms. Hanabusa. But then you need the second class for that?
Mr. Monette. No, you don't need a second class. You need
Congress to authorize it, just like they are doing it for
lawyers.
Ms. Hanabusa. But the second class, or the second part that
we are discussing now, which is the issue of where the
attorneys' fees is falling into, that you are saying is what
Congress authorized?
Mr. Monette. Yes.
Ms. Hanabusa. Because as I understand from what little I
have read on this, is that there was no class certification on
any other issue other than the accounting portion. Is that
correct?
Mr. Monette. Right. That is right.
Ms. Hanabusa. No, I have not read the Cobell Settlement,
but I intend to do it now. My understanding is that there has
never been any adjudication of anything as to the merits. It is
just that the settlement was reached and that settlement has
become a public document, correct?
Mr. Monette. Correct.
Ms. Hanabusa. So how does that public document, or in terms
of the settlement, which is usually as a result of the class
action that is filed, how does that then interface with what
you are saying Congress did?
Do you understand what I mean? You have a legal document, a
class action, and a complaint which requests certification,
which according to you on the issues that the Congress then
addressed, was not certified, and was not before the court.
So somehow what you are saying Congress did, and what was
not before the Court, has somehow got to be melded together to
become the Cobell Settlement?
Mr. Monette. It is a fascinating, and one of the most
convoluted stories that I have ever come across. Congresswoman,
the judge, on November 5, 1998, of his own accord, not being
asked by the Plaintiffs or the Defendants, struck wording from
the complaint.
And all of the wording had to do with whether we were
asking for money, because he said I don't have the jurisdiction
over that. So I will strike that all out so that we are going
forward simply on an APA type of ex parte, waiver of sovereign
immunity claim. And so that is why it proceeded on that.
Fourteen years later, when they come to Congress with the
first class that was certified and the court had jurisdiction
over, they added in a second class that was not certified, and
that the court did not have jurisdiction over, and would not
unless Congress did what it did.
And that is not to say that what Congress did is
constitutional, simply because of what I am saying, is that if
the court thought it had a case or controversy in front of it,
it would have certified that class before it sent it to
Congress, but it didn't, and it couldn't.
So it asked you all to do it, and so this body then created
a case or a controversy, the legislation, in invoking Article I
powers for an Article III court. That likely is
unconstitutional as well.
Ms. Hanabusa. Then I think that if you feel that way, you
would challenge it.
Mr. Monette. I intend to.
Ms. Hanabusa. And that is what I thought you were going to
say. Now, given that scenario, there still is this document
called the Cobell Settlement that has been entered into court,
and that was arrived at how, if you can tell me?
Mr. Monette. That was arrived at when they lost at the
trial court, and it went to the appeals court, and they vacated
the money, and said an accounting can be done. Now they are
going, crap, now the highest court that we have gone to says
that we have to do an accounting.
And they are learning that perhaps the accounting is not as
bad as they thought. In fact, the Department of the Interior
came out publicly at that time and said we have done a complete
accounting of the five named class representatives, and there
is a variance and a total of less than $100. Those are the
Named Plaintiffs.
So at that point, they filed in the Supreme Court, and
thinking that we are going to lose. We are going to lose on a
variety of grounds here, particularly because if the Court
orders any money, we are in violation of the Tucker Act
precedent.
So that is where the story takes over, and so they come to
this body and do what they did. Well, maybe more specifically
on your question, they then went behind closed doors at the
Department of the Interior, and the Department of the Interior
said, well, perhaps we will help you get this settlement
through, and what is in it for us.
And the Plaintiffs' lawyers said, well, how about if
instead of just settling all these accounting claims, how about
if we let you guys off the hook on all these oil, and gas,
coal, and water claims that these Indians have as well.
We will let you off the hook and put that on the table. A
few people said you don't have the right to put that on the
table. Either side. It is not part of the lawsuit. They put it
on the table and brought it here, and got this body's stamp of
approval on that.
Ms. Hanabusa. Thank you. Thank you, Mr. Chairman.
Mr. Young. Mr. Gosar.
Dr. Gosar. Just two quick questions, Professor. How is it
that class action counsel can seek over $220 million for legal
fees, but the average class member gets about $2,000?
How is it that that type of disparity is fair and
reasonable to the injured party? Are class action lawsuits
simply a way for attorneys to get rich by using claimants like
the Cobell Plaintiffs as straw men?
Mr. Monette. Right. It is becoming known as the settlement
class action, and not settlement of a class action, but a
settlement class action, put forth simply for the purpose of
settling.
And in fact it has evolved so that we save more time, and
money, and efficiency, and you will get a Merck, or a Pfizer,
or somebody who will get these kinds of settlement class
actions, and simply say, look, let us go in the back room and
settle it, OK?
And they have never even gone through the exercise of
establishing or certifying a class, establishing jurisdiction,
and the courts and the law professorate are increasingly
frowning on that, because it is starting to put some real
twists and glitches in the law.
Dr. Gosar. So restrictive reform should be enacted or
should be looked at in regards to that?
Mr. Monette. Absolutely.
Dr. Gosar. Thank you very much.
Mr. Young. If there are no more questions, I am going to
ask a couple of questions. If anybody wants to leave, fine,
just whatever you want to do.
Richard, has the Plaintiffs lawyers received any previous
compensation in this case?
Mr. Monette. They have.
Mr. Young. What amount was it, and what was it for?
Mr. Monette. If you can figure that out with me, because
that is like pulling teeth. Talk about digging for the needle
in the haystack. They have--and in fact when they have won on
those rare occasions in these 14 years, they made petitions
under the Equal Access to Justice Act, and got paid.
And I am told that it is in the millions. They got paid
when they actually won a motion. They want money now over and
above that, but I can't figure out how much. I did not file a
FOIA because you all thought that you were going to get that
information last time, and evidently you have not, and I
haven't either.
Mr. Young. Now, as a lawyer, and I have some lawyers, and I
have a nice one sitting at the front dais up here, I want to
know why we don't know who--well, who paid it? Was it the
taxpayer?
Mr. Monette. The taxpayer did, and because of that, of
course, we should have a right to find out. I will say that I
just did not pursue it as much as I should have, because this
body thought that it was going to, and I guess I was going to
wait until you did, and told us all.
Mr. Young. But if it is the taxpayers, then we have a right
to know how much.
Mr. Monette. Absolutely.
Mr. Young. So I would suggest that I will use that
subpoena, and we will get that information, because I think
that is very important as to how much money they received from
the taxpayers already in this case. So thanks for answering
that question.
You already stated this, I think, and you said that the
Plaintiffs took a route of colluding with the Department of the
Interior to create a new class of claims, and that is what I
thought you were referring to a while ago behind doors; is that
correct?
Mr. Monette. Exactly.
Mr. Young. And you said in a statement that the Plaintiffs
summarily rejected a $7 billion offer to settle. Where was that
from, the $7 billion?
Mr. Monette. Well, I think that is more than urban legend,
but we did have on the Senate side them floating the numbers,
and Senator McCain in fact was the person who floated it most
clearly.
I think it was $7.8 billion, I think, and what we have
heard--and remember now that some of this was going on with
some people who were informed, and when tribal leaders are
having a meeting, and I find a way to squeeze myself in the
door sometimes.
So there was communications from the Department that they
had communicated with The Hill, and that there would be
agreement on that figure, and that it was Mr. Gingold, the
Cobell attorney, who flat out rejected that amount.
Mr. Young. Did the Plaintiffs know that as far as the other
class action?
Mr. Monette. The unnamed Plaintiffs, the class itself,
didn't know.
Mr. Young. So Patricia didn't know that?
Ms. Douville. No.
Mr. Monette. No.
Mr. Young. And would you have been happy with the $7
billion?
Ms. Douville. I would be happy with just a completed
accounting.
Mr. Young. The reason that I ask that question is that what
we wanted was an accounting, and that is what I wanted when I
started this a long, long time ago. You may not be aware of
that.
Patricia, you are right. The oil lease, and the coal
leases, and the things that went on with this government, we
estimated it at over $17 billion of mismanaged, misdirected
utilization of Native lands for the benefit of whom, I don't
know, other than a few individual people.
And we were looking for that to establish the amount that
was owed, and for the Committee to just keep in mind, this was
an agreement reached, and why I don't know, other than the fact
like you said that they went down, and we won't have any more
auditing, and we won't have any more looking for those records
that were conveniently lost, and that way you will be off the
hook.
And I think that was the urging of people to settle this so
that the Federal Government would not be on the hook. But that
deprived the Alaskan--well, Alaskans lost $700 million by the
way, and that is over just a short period of time, and with the
same type of action under the BIA.
And by the way, Patricia, we are going to write a bill that
gives you the ability to do these things without having to go
through the BIA. We are going to do that, because I think you
have that responsibility.
Richard, you said that it was money that was always part of
this case, and that one of the outgrowths of the accounting
itself would be a restatement of the accounts. Now, what does
that mean? Well, that is what she said.
Mr. Monette. I am not sure what he meant, but if there were
variances----
Mr. Young. And that was testimony that was provided to us
by the way.
Mr. Monette. Oh, OK. The idea was that if there are
variances in the account, that if the account had too much,
maybe they would take some out. Of course, the idea being that
the account had too little, and that number would simply be
corrected.
And if that were the case that it would still fit within
the equitable remedy, and not asking for an infusion of cash,
but simply adding a zero, or a one, if that is what was needed
on the account, and thereby fitting within the Federal District
Court's jurisdiction.
And that is why those arguments were consistently made, but
it sounds like he said a little more there, and I am not sure
that I can explain that.
Mr. Young. I will get that to you. Do you think that H.R.
887 creates any separation of powers problem? I believe you
already addressed that. In other words, in passing this bill to
limit attorneys' fees improper legislative meddling for the
Judicial Branch?
Mr. Monette. Absolutely not, not on the settlement that
this body enabled and authorized.
Mr. Young. Because we did it. We passed a law, and we can
change what we want.
Mr. Monette. It could not even be on the court's table if
this body bad not taken this action. Certainly this body can
follow up and change a provision.
Mr. Young. Should Congress allow the District Court to have
complete discretion over the award of attorneys' fees?
Mr. Monette. No.
Mr. Young. No? I knew you were going to say that. And in
the lawsuit of Cobell versus Salazar, is it customary for the
members of the class to pay attorneys' fees, or the government
to pay them?
Mr. Monette. Well, it is customary for the Defendant to pay
them when it is a suit against the government. So the
government would pay, and there is some disagreement on that by
the way.
Mr. Young. Before the Cobell Settlement was publicly
announced did class counsel ever say that their efforts would
result in individual Indians bearing all costs associated with
the litigation?
Mr. Monette. Not that I know of. I mean, there is a classic
contingency fee, and they are saying fourteen-and-a-half
percent, then we would assume that that fourteen-and-a-half
percent would come off the top.
But our understanding, and it did not take a lawyer to have
this understanding, that if this is simply an accounting case,
then there is not going to be any cash being exchanged, and
simply changing numbers on the accounting ledger.
At that point the lawyers would make their arguments to the
court under the Equal Access to Justice Act for payment, and
they would present their actual hours to the court, and if they
thought that they could do that, and if they thought they could
get $223 million, then you should let them have at it, but my
bottom-dollar bet is that they can't.
Mr. Young. OK. Now, the government refused to testify
today, but nevertheless the government is on record as saying,
quote, ``after Plaintiffs' 2011 victory on appeal, they
suffered nine straight defeats at the appellate level.'' What
is in evidence of those defeats?
Mr. Monette. Well, right now where we stand is that they
lost. There is no money on the table. The Appeals Court took
the $455 million off the table and said an accounting can be
done, and so go do it, and that is where we stand.
Now, to me--I mean, this is the irony perhaps in this, and
I am sure that this will get used against me by the Cobell
lawyers, but to me I won, because the Appeals Court said that
an accounting can be done, and so go do it. That is what I
wanted.
So the lawyers, they lost, because if it is just an
accounting that is going to be done, there is no way that they
can justify millions of dollars.
Mr. Young. OK. Now, you said that the lady is going to win
$2 million, and Patricia is going to get maybe $2,000?
Mr. Monette. That is what they put out to the public.
Mr. Young. Well, where does she get the $2 million?
Mr. Monette. That is actually in the statement that they
sent to the class members, that Ms. Cobell stands to recover $2
million. The other Named Plaintiffs, $150,000 each, and then
the rest of the class will be between $1,000 or $1,500.
If they accept the second class, and have no more activity,
or perhaps a lot more than that. I should point out by the way
that there is a small number of class members who will get a
significant amount.
And it is because that second class has as a formula the
activity in the account. So if you had a lot of activity in
your account, then they are going to use a formula to get you
money.
And let me tell you something here that I think you will
find interesting. We have unnamed class members out there who
have no activity in their account during that period but one.
They sold their land.
Let us say they sold their land near Agua Caliente near
Palm Springs in California for $10 million, let us say, OK? One
event in that account period, and based on that $10 million
sale, that formula is going to get them another one to $2
million.
Nobody argues that there was any mismanagement of that
account. Nobody argues that they didn't get fair market value
for their land, but they had activity in their account over
that 20 year period. They sold land, and now they are going to
get a windfall bonus from that.
Now, how is that fair to her? Can I say what I said last
year? That is about the worst thing that this Congress has ever
done to Indian tribes, and right up there with termination and
allotment. This will be one of the worst things in the history
of the Federal-Tribal relations.
Mr. Young. Now, realistically, I am not going to disagree
with you, because it was sold to me as a booger. I am just
raising the legal fees, but I never agreed with this to begin
with basically.
Everybody said, well, let us get it out of the way. Let us
put it away and we will get it done, but that was--and pardon
the expression, but it smells. And I don't know whether we can
undo it, but one thing that we can do if I am not mistaken in
that $223 million that they are asking for, it comes out of
every individual Native, and in fact deprives the right to
consolidate the lands.
Is that really the problem? Well, how much money is
supposed to go to consolidation?
Mr. Monette. $1.9 billion.
Mr. Young. $1.9 billion out of?
Mr. Monette. $3.4 billion.
Mr. Young. $3.4 billion, and the rest of it goes to the
Plaintiffs deal, and how much consolidation will occur with
that $1.9 billion? Not very much will it?
Mr. Monette. Well, it will depend on the reservation. Some
of the valuations that are done by the Bureau of Indian Affairs
are high, and so of course it will be less. Some of them are
very, very low, depending on where you are in the country, and
it can go a long ways.
But what we get is that we get these bureaucrats down there
doing these plans for consolidation. The consolidation should
be geared toward making the community work, especially for
business, commerce, economic development. If you go out to some
of these reservations, these allotments are scattered all over
the place.
Mr. Young. I just came out of Arizona, and I saw it.
Mr. Monette. And the Bureau of Indian Affairs, in their
wisdom of doing these allotments 60 or 70 years ago, didn't
think of, for example, a small tidbit like a downtown.
So you drive on these reservations, and you have a tire
shop here, and a markers and monument shop there, and a hair
design shop there, all an eighth-of-a-mile apart on all of
these allotments, and there is no efficiency, no place to park,
a waste of gas, a waste of time for people.
And the Tribes would like to look at these consolidation
plans and make them work, including to join the real world with
economic development, getting some trade and commerce, and some
business activity.
And right now the way it is done, and I am pretty certain
the way that the Bureau will do it in the future, will not
facilitate any of that, and that will be a dirty shame as well.
Mr. Young. Well, I am just going to ask both of you as I
have asked the other witnesses before us, what ideas you have
on how we can improve this situation, and I agree with the
bureaucrats and the stagnation of the Department of the
Interior and the BIA.
It has been badly serving the American Indians all this
time, and we want that information so that we can be helpful.
Ms. Noem, you have a question?
Mrs. Noem. Thank you, Mr. Chairman. I just had a follow-up
for Ms. Douville. The question is what is your feeling in your
Tribe specifically? Do they prefer this type of monetary
settlement, or is their goal just to have a complete
accounting?
Ms. Douville. Thank you. Well, we are talking about the
most impoverished people that America has, and at this time the
amount of money that is going to be given to them is a huge
amount of money, and it is needed.
It is much needed in Indian Country, and so with that, it
is accepted, the first class to be accepted, and you get that
$1,000 no matter what, even if you want to be a Plaintiff or
not. You get that.
So the acceptance of that is good, but they don't
understand what strings are attached to the second class of
money that is going to be given out, and I don't think it is
fair for this settlement to basically dangle a carrot in front
of a starving rabbit, and that is what this is doing.
So, I, myself personally don't believe that this is good
for us, but on the Tribe's side, I can say that it will help,
but also in this settlement agreement, it also states that it
is for individuals.
They don't have any stipulations for the Tribes themselves.
It was for the individuals, and so the Tribe does not take a
stand as to what their position would be, because it is an
individual's case.
Mrs. Noem. A follow-up question. So if attorneys receive
$223 million, and maybe Mr. Monette can answer this, as opposed
to the $50 million or $99 million cap that this bill proposes,
where do they take that money from? Where is the money
literally coming from if that cap is not there?
Mr. Monette. It will come from the amount of money that is
uncertain that is set aside to address this formula. So
everybody gets their thousand, and then they get $500-plus
according to the formula.
So that plus according to the formula has an uncertain
amount of money in it. It will come from that. At least that is
the best reading of it right now.
Mrs. Noem. So the more money the Plaintiffs made, the less
money that will go to individuals eventually?
Mr. Monette. A direct dollar for dollar.
Mrs. Noem. OK. I appreciate that. Thank you, Mr. Chairman.
Mr. Young. Mr. Boren.
Mr. Boren. OK. This is my last statement. I have been a
proponent of tort reforms since I have come to Congress. I am
actually the Co-Chair of the Civil Justice Caucus, and so I am
not a big fan of these large fees.
But I also believe that a lot of these attorneys will not
enter into representation unless they have an incentive to make
these cases. In most contingency fee based cases, it is about
33 percent of the take.
In our offices, we deal every day in Social Security
Disability Cases, and of course, I always say don't hire an
attorney. We will do it for you. But a lot of them take 33
percent.
So we have to have some incentive for these attorneys to
make this case. The money though that comes to pay these
claims, it is from Title 31 of the United States Code, Judgment
Fund, and not from other Indian monies.
And so that is one thing that I wanted to clarify, and then
another thing that I wanted to clarify, Mr. Monette, you made
some statements about, well, it could have been $.8 billion.
Well, I heard that from John McCain.
I mean, that to me is what we call at home a wag. It is
something that you kind of pull out of the air, and a lot of
this stuff, you may not have been privy to. So that is
something else that I want to point out.
But again I think that this hearing is very important, and
I am glad that the Chairman has had it. I think we may be
coming back and revisiting these same issues in a few months.
And, yes, Congress can pass any bill that it wants to, and
it can do anything that it wants to, but all this work that has
gone into this settlement, and even if it is not perfect, no
settlement is perfect. There are some flaws.
But the last thing that we needed to do was unwind decades
of work, tons of work, on behalf of individuals, and do I think
that $2,000 is enough? Probably not.
But we need to be careful that Indian Country gets $2,000
instead of zero. So as we move forward, I just want to be very
deliberative, and I am glad that the Chairman had this hearing,
and I won't say anything else. Thank you.
Mr. Young. One thing. Richard, did you say that you were
going to file a brief on this matter?
Mr. Monette. I intend to, yes.
Mr. Young. And are you going to do that pro bono, or are
you going to be hired to do so?
Mr. Monette. I am going to do that pro bono, and I am going
to find a Plaintiff, and I have, an IIM account holder who has
enough money, so she won't accept money in exchange. We are
going to have a lawsuit.
Mr. Young. Remember, that is on the record. If you win,
there will be no money in exchange.
Mr. Monette. That is on the record, yes.
Mr. Young. I want to thank both of you. I think that this
has been very informative, and rewarding, in the sense that we
will be looking at this again. I would like to do something
prior to the decision of what attorneys they are going to get,
and maybe I can give a little direction to the Justice
Department, and maybe it won't. I don't know.
But there is no way I think that we should be paying $223
million for an $86 million settlement. That is about what it
was. A thank you to the both of you, and with that, this
meeting is adjourned.
[Whereupon, at 12:23 p.m., the Subcommittee was adjourned.]
[Additional material submitted for the record follows:]
[The prepared statement of Mr. Gosar follows:]
Statement of The Honorable Paul A. Gosar, a Representative
in Congress from the State of Arizona
Mr. Chairman, thank you for giving me this opportunity to address
the subcommittee. And I want to thank our witnesses here today as well
for taking the time to present their views and information to Congress.
My district in Arizona has the largest Indian Reservation in the
country. It is home to the Navajo Nation. My district has many tribes
of Apache, the Yavasupai and the State of Arizona as 22 federally
recognized tribes.
I have stated publically my support for H.R. 887, and in addition,
I declared before the House my serious concerns about the $227 million
lawyer fee request.
In the Cobell, case, we found the mismanagement of the Native trust
monies abhorrent and the need for an accounting great. That was
certainly an injury to the Native peoples. But I oppose a second injury
to the Native peoples. It shocks the conscience to see such a large
request. Every dollar paid out in legal fees is a dollar the injured
Native Americans will not have.
I recognize that the work done by Plaintiffs' counsel on behalf of
the claimants was important. But to see lawyers' fees in the hundreds
of millions, compared to the average award to the injured American
Indians of $2,000 tells me we have a serious problem. For that reason I
have proposed, in H.R. 1150, class action reform in the area of health
insurance, and I will continue to focus on legal reform. We cannot
tolerate a legal system where the injured parties get a trifle after
years of litigation, and the lawyers walk away with hundreds of
millions. If there is a better case for legal reform than Cobell, I am
not aware of it. I therefore support this legislation, H.R. 887, that
limits the fee award to $50 million. But H.R. 887 is simply a remedy
for one case. What Cobell tells us is that the system is broken and we
need to reform it.
Let me say a word about why H.R. 887 is fundamental to us on this
Committee, and to all of Congress. Congress has the ultimate power over
Indian affairs. It also has the duty to protect Native American rights.
The Indian Commerce Clause conveys the express power to Congress over
Native American affairs. As a result of these powers, it is well
established that Congress has plenary power over Indian affairs. It is
up to us, members of Congress, to make sure we exercise these
supervisory obligations. This hearing, and H.R. 887, are part of these
constitutional duties. We would be remiss if we let such an onerous and
overreaching fee request proceed forward and allow the American Indians
to be victimized yet again.
The federal government has a ``trust relationship'' between it and
the Native American tribes. This trust relationship obligates Congress
and the federal government to protect the well-being of Native
Americans, peoples who tendered their lands in return for this trust.
We, the guardians in Congress, must now intervene to protect those
under our care, especially where a fee dispute now creates a conflict
of interest between the class members and their legal counsel.
In rectifying the breach of fiduciary duty documented in Cobell, we
cannot allow another breach to proceed under our noses. Just as the
government has a fiduciary duty to the Native Americans in the first
instance in ensuring trust monies are not misappropriated, so too
Congress has plenary power to ensure that the Native American class
members are not gouged in a fee award.
Thank you again for coming to this hearing today and giving me the
opportunity to speak and listen.
______
[The prepared statement of Mr. Markey follows:]
Statement of The Honorable Edward J. Markey, Ranking Member,
Committee on Natural Resources
Mr. Chairman, H.R. 887 is unjust, unwise and likely
unconstitutional. As a result, it should remain un-enacted.
This legislation is unjust because it represents an unwarranted
intrusion into pending litigation. Congress has provided statutory
authority, and the courts have established case law, setting out a
process and standards for determining attorney's fees. In the Cobell
case specifically, both the pending settlement agreement and the
legislation enacted last Congress funding that agreement, recognize
that the amount of attorney's fees is properly determined by the Court,
not the Congress.
The Court will review the entire, 15-year history of this landmark
litigation, including detailed filings documenting expenses, hours
worked, billing rates, benefits provided to the plaintiffs and relevant
precedent. All parties will have an opportunity to present arguments
and then the Court will apply the relevant law and award the
appropriate fees. And each step of this process will be public and
transparent.
In contrast, H.R. 887 would simply impose an arbitrary number
selected by Chairman Young and Chairman Hastings. Period. It is clear
which of these two approaches would reach a more equitable conclusion.
It should be noted that this Committee has a checkered history when
it comes to intervening in ongoing litigation. Under previous
Republican Chairmen, this Committee injected itself into court
proceedings regarding bonding requirements, the Antiquities Act,
federal whistle-blowers, and even a failed Texas Savings and Loan. The
end result of these intrusions was, at best, to create the appearance
of political gamesmanship in the judicial process and at worst to
actually tip the scales of justice.
This legislation is also unwise because it jeopardizes the entire
settlement. The agreement ending this massive case is not final and
resolution of the attorney's fees is an open question before the court.
Should Congress, without process or justification, impose an arbitrary
cap on those fees, the settlement could collapse and the litigation
could resume.
While the amount to be paid by the government pursuant to the
settlement is significant, the amount awarded to the plaintiffs by a
jury could be more--potentially much more. Given that the assets
mismanaged by the federal government are worth billions of dollars,
that the mismanagement went on for more than a century, and that there
are half a million plaintiffs--rash, political moves which could
destroy this settlement would cost the taxpayers dearly.
And lastly, H.R. 887 is almost certainly unconstitutional because
it violates the Separation of Powers Doctrine. Just as the Congress
could not pass a law reversing the class action status granted in this
case, or granting summary judgment to the defendant, we cannot pass a
law setting specific attorney's fees. The Federal District Court for
the District of Columbia has the requisite information, pleadings,
process and authority to resolve this issue; Congress should allow the
Court to do its work.
The truth is, if we were truly committed to reducing attorney's
fees in this case, we had ample time to intervene. Congress could have
lowered these attorney's fees--or avoided them altogether--by stepping
in to right the wrong done to the Cobell plaintiffs at any point during
the 100 years it went on. To circle back now, just as this century of
injustice is on the verge of being remedied, to complain about the
terms, is plainly wrong.
I would like to thank the witnesses for their time and effort to be
here today. I yield back.
______
[``Excerpts of the Government Position on the effort by
Cobell lawyers to get $223 million'' submitted for the record
by Chairman Don Young follows:]
Excerpts of the Government Position on the effort by
Cobell lawyers to get $223 million
Submitted for the Record by Chairman Don Young
Subcommittee on Indian and Alaska Native Affairs
Hearing on H.R. 887, April 5, 2011
(All excerpts are from the Defendants' Response and Objections to
Plaintiffs' Petition for Class Counsel Fees, Expenses and Costs Through
Settlement, filed in U.S. District Court for the District of Columbia,
02/24/11)
Class counsel cannot escape a simple fact: although they enjoyed
some early success in this case, they have already been compensated for
that success through prior fee petitions. But since their 2001 success
in the Court of Appeals, class counsel have lost virtually everything
they have tried, being rebuffed in nine consecutive Court of Appeals'
decisions. Throughout that period, rather than advancing this case to
conclusion, class counsel embroiled the Court, class members, and the
government in a series of wasteful diversions characterized by ad
hominem attacks on government officials and a lack of any discernible
benefit to the class. The broader resolution of Individual Indian Money
(IIM) management issues and the determination of Congress to bring
these issues to a close address claims not pursued by plaintiffs and
unconnected to the detours they actually pursued. (pp. 1-2)
Even a fee of $99.9 million--all class counsel are permitted to
seek--is grossly excessive. (p. 2)
Class counsel contend that they ``have litigated novel issues and
navigated a series of ten interlocutory appellate decisions,'' Pet. at
18, but after a partial victory in Cobell VI (for which they have
already been paid), the work for which they now seek fees resulted in
nine straight defeats before the D.C. Circuit. (p. 10)
By 2007, class counsel had been paid approximately $8.9 million in
fees, costs, and expenses. (p. 14)
[T]heir total includes billable hours for which counsel have
already been paid--or worse, that counsel have claimed and the Court
has already rejected. (p. 16)
Assuming that there are, in fact, contingent fee agreements
totaling 14.75%, applying that percentage to the proper $360 million
common fund results only in a payment of $53.1 million. But no basis
exists for using that claimed 14.75% percentage at all. (p. 15)
When seeking to certify the original class in 1996, plaintiffs
stated that class counsel ``are working on an hourly basis; none has
been retained on a contingent fee (though some have agreed to withhold
a portion of their hourly charge until a favorable termination of the
case).'' (p. 15)
Much of class counsel's efforts over the past decade have been
devoted to sideshows having little to do with achieving the historical
accounting that plaintiffs sought. Class counsel's skirmishing ran up
costs for both sides. (p. 10)
The incivility for which the Cobell litigation has become known
presents no better argument for payment and should not be rewarded. (p.
11)
Class counsel sought to have the Secretary of the Interior held in
contempt and expanded this vendetta to virtually every lawyer and
official at the Departments of Justice, Interior, and Treasury who had
any role in the case, leading to the pendency of contempt or sanctions
charges against 70 individual government employees, of whom 31 were
targeted multiple times. The ploy needlessly interfered with the duties
and personal lives of scores of public servants and cost the government
more to defend the case because of the collateral attacks, but it
garnered nothing for plaintiffs' case and provided no benefit to the
class. (p. 11)
Even worse than the diversions from issues in the case is that
costs were driven up by tactics that affirmatively frustrated the
historical accounting that plaintiffs sought. (p. 12)
The class members should not be taxed tens of millions of dollars
to compensate attorneys for efforts that frustrated the very remedy
that they purported to seek. (p. 13)
Despite those representations, counsel now argue that their service
to those clients merits a payment of more than twice that amount--
further depleting the funds available for payments to class members by
more than $120 million. Pet. at 25. Plaintiffs' proposed order directs
that the class's custodian of funds ``promptly shall pay to Class
Counsel $223,000,000.00 [in] fees and $1,276,598 in expenses and
costs.'' [Dkt. 3678-15]. (p. 3)
They then petitioned under EAJA and obtained an award of over $7
million in fees and expenses for their work, which the government
promptly paid. They also received over $750,000 in additional fees and
expenses relating to discovery disputes. (p. 4)
After that initial phase, class counsel had little success. The
case degenerated into a series of contempt and sanctions motions
against 70 people and protracted efforts to shut down the Department of
the Interior's computer systems. The trial court conferred a few
temporary victories--a contempt citation against the Secretary of the
Interior and an order to disconnect most of Interior's computer
systems--but those were short-lived. After Plaintiffs' 2001 victory on
appeal, they suffered nine straight defeats at the appellate level. (p.
4)
The Court of Appeals expressly rebuffed class counsel's effort to
dispute their losing streak: ``Plaintiff-beneficiaries'. . .only
example of a break in the constant stream of reversals. . .'' (p. 4)
Class counsel's petition asks class members to foot the bill for
their years of fruitless digressions from the core issue in the case.
Settlement was precipitated not by class counsel's litigation efforts
(which, in the years since they were paid for previous work, failed),
but by the government's decision to end the litigation on terms that
required congressional approval and set a better course for Interior
and its relationship with Native Americans. (p. 5)
Class counsel justify their excessive fee petition by inflating
both the amount of the fund for which they are responsible and the
percentage to which they are entitled. (p. 7)
The $1.9 billion appropriated for land consolidation is likewise
not the product of class counsel's efforts, was not sought in the
original or amended complaint, and is simply irrelevant to the
calculation of any common fund. (pp. 9-10)