May 16, 2017

A divided D.C. Circuit on Tuesday rejected a Native American class representative’s challenge to a plan to redistribute $380 million left over from the landmark Keepseagle settlement of racial discrimination claims by farmers and ranchers against the government, but a biting dissent imputed political motives to the deal and questioned its constitutionality.

Class representative Keith Mandan had urged the circuit court to reject the proposal, approved in April 2016 by a D.C. district court, to divide much of the unclaimed portion of the original $680 million agreement with the U.S. Department of Agriculture among previously successful claimants and nonprofit organizations that serve Native American farmers and ranchers. Mandan contended that all of the leftover funds should go to the successful claimants instead.

Senior Circuit Judge Harry T. Edwards wrote for a 2-1 panel majority that Mandan hadn’t shown that the district court abused its discretion by approving a compromise proposal to amend the settlement’s cy pres provisions to increase payments to successful claimants and provide more than $300 million to benefit the nonprofit organizations.

“We have no good reason to second-guess the district court’s conclusion that, in providing both supplemental payments and reforming the cy pres process, the negotiated compromise fairly balances the parties’ competing positions,” the majority said.

Class counsel Joseph M. Sellers of Cohen Milstein Sellers & Toll PLLC told Law360 on Tuesday that distributing some of the leftover funds from the settlement to benefit Native communities was intended to help members of the class who otherwise wouldn’t have received any benefit from the deal.

“This wasn’t just some free giveaway of funds. These funds were paid in exchange for the government getting all these claims settled,” Sellers said. “We thought it was important, and still believe it’s important, to distribute the balance to serve the broader community.”

The full article can be viewed here.