October 21, 2014

Panel hears plan to cap fees

AP PHOTO / GERALD HERBERT  Elouise Cobell poses, center, with her legal team in the law offices of Kilpatrick & Stockton in Washington in this AP file photo. Left to right are Bill Dorris, Cobell, Keith Harper, Dennis Gingold and Geoffrey Rempel.  A Cobell spokeman said if Congress passes the legislation, it will void the $3.4 billion settlement.



WASHINGTON – Attorneys in the government’s $3.4 billion settlement with American Indians over mismanaged royalties are “stonewalling” a congressional panel as they ask a judge to more than double their fees in the case, the committee’s chairman said April 5.

Rep. Don Young, R-Alaska, is co-sponsoring legislation to cap the attorneys’ fees at $50 million.

He said in a hearing before the House Subcommittee on Indians and Alaska Native Affairs, which he chairs, that “it smells” for the plaintiffs’ lawyers to now make the argument that they deserve $223 million, after the settlement limited their fee request to $99.9 million.

Young said both the plaintiffs’ attorneys and the Obama administration officials who negotiated the settlement refused to testify Tuesday on the proposal and have stymied previous attempts to gather information about how the fees were structured.

“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,” Young said.

If Congress passes the legislation, it will void the settlement, plaintiffs’ spokesman Bill McAllister said. Congress had a year to vet the terms of the settlement before it approved the deal in December, he said. Now it’s back under the authority of a federal judge and out of the panel’s hands.

“Political interference in the judicial process would harm 500,000 individual Indians, undermine our system of government and jeopardize the settlement in its entirety,” the plaintiffs’ attorneys said in a statement.

The federal government never would have agreed to a $3.4 billion settlement with American Indians if it knew the plaintiffs’ lawyers would try to more than double their fees, Young said. Even $100 million is too much, he added.

Other subcommittee members echoed the belief that $223 million in fees is too high. But some said the bill by Young and Republican Rep. Doc Hastings, chairman of the House Natural Resources Committee, to cap the fees could scuttle the settlement and possibly leave hundreds of thousands people without any award at all.

With a court hearing on the issue scheduled for June 20, it would be premature for Congress to vote on the proposal, said ranking subcommittee member Dan Boren, D-Okla.

“The last thing we need to do is unwind decades of work, tons of work, on behalf of individuals,” Boren said.

No action was immediately taken on the bill. Young said he hoped the proposal would give some direction to the U.S. Justice Department as it works through the issue in court.

The settlement ended 15 years of litigation between Native American landowners and the federal government.

The plaintiffs, led by Elouise Cobell of Browning, Mont., claimed the individual accounts of hundreds of thousands of Indians were mismanaged by the government for more than a century, costing them billions of dollars in royalties.

The settlement calls for $1.5 billion to go to individual Indian account holders – a number that will likely end up between 300,000 and 550,000. Another $1.9 billion would be used by the government to buy broken-up Indian lands from individual owners and then turn those lands over to tribes. And an additional $60 million would go to a scholarship fund for Indian students.

The plaintiffs’ attorneys agreed in the settlement not to request fees in excess of $99.9 million. But on Jan. 25, lead attorney Dennis Gingold filed a petition with the judge in the case saying that agreement doesn’t prevent the judge from awarding more if he determines the amount is far below the standards in such a case.

Gingold said a fee award of $223 million, plus costs and expenses of $1.27 million, is “in accordance with controlling law” and within the court’s discretion. The plaintiffs’ attorneys “toiled for 15 years with an enormous risk they would not be paid for their work,” Gingold wrote.

The Justice Department in a February court filing called the $223 million proposal “grossly excessive,” and said it went against the $99.9 million provision in the settlement.

“They touted that binding commitment repeatedly to Congress and to class members to persuade Congress to enact the legislation,” Justice Department attorneys wrote.

Only two people testified before the panel  last week, and both said they believe the attorney fees should be capped.

Richard Monette, a University of Wisconsin-Madison law professor and former tribal chairman of the Turtle Mountain Band of Chippewa, said the plaintiffs’ attorneys should have revealed it to Congress and others in the lawsuit if they had some kind of agreement to recover more than $99.9 million in fees.

“We unnamed class members are owed huge obligations when a class settlement is made,” he said.

The only other witness to testify, Patricia Douville of the Rosebud Sioux Tribe of South Dakota, said the money the settlement will bring makes it hard for impoverished residents of Indian Country to turn it down, even if the settlement is a bad deal.

“I don’t think it’s fair for the settlement to dangle a carrot in front of a starving rabbit, and that’s what this is doing,” she said.

 

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