George and Marilyn Keepseagle, both citizens of the Standing Rock Sioux Tribe, take part in a meeting about their historic lawsuit at United Tribes Technical College in Bismarck, North Dakota, in November 2010. Photo: Dennis J. Neumann / United Tribes News

Law | National

Court decision supports release of $380M in Keepseagle settlement funds

Tuesday, May 16, 2017

Another big chunk of funds should be headed to Indian Country as part of a historic settlement that addresses discrimination against Indian farmers and ranchers.

But not everyone is happy with the way everything turned out. Two tribal citizens who have been a part of the Keepseagle lawsuit didn't want to share $380 million in leftover funds from the settlement. And one appeals court judge ruefully described the entire dispute as a "big payday" for attorneys.

Keith Mandan, one of the named plaintiffs, and Donivon Craig Tingle, a member of the settlement class, wanted the money to go to the ranchers and farmers who experienced discrimination at the Department of Agriculture. They argued that the entire settlement -- worth a total of $760 million -- belongs to the class and no one else.

On the other side of the saga are a different group of named plaintiffs and their attorneys. They brokered a modification to the settlement that distributes most of the remaining $380 million with Indian Country.

The changes, although controversial, are perfectly legal, the D.C. Circuit Court of Appeals concluded on Tuesday. While the three judges who heard the case were divided 2-1 on the issue, their decision should restart the flow of payments from the settlement, which the Obama administration reached in 2010 after more than a decade of litigation.

"We look forward to putting this money to work to support farming and ranching among America's first farmers," attorney Joseph Sellers told The Associated Press after the ruling was issued.

Indianz.Com SoundCloud: D.C. Circuit Court of Appeals Oral Arguments in Keepseagle v. Vilsack

The first round of checks goes to the 3,605 class members, a group that includes Mandan, who is a citizen of the Mandan, Hidatsa and Arikara Nation, and Tingle. Each will receive another $18,500, plus a $2,775 payment sent to the Internal Revenue Service on their behalf.

The payments had been held up as a result of the appeal, Keepseagle attorneys noted last year. The total amount comes to about $77 million.

Another chunk of $38 million is set to go to tribes, non-profits and educational institutions with programs that help Indian farmers and ranchers. Keepseagle attorneys started soliciting applications in May 2016 but the appeal held up the funds.

Finally, after the named plaintiffs receive additional incentive payments, the remaining $265 million is to be invested into a trust fund, whose proceeds will be used to help farmers and ranchers in Indian Country. The mechanisms for this effort are still in development.

The concessions were reached after a federal judge rejected an earlier attempt at modifying the settlement. The prior effort didn't even have the support of the first named plaintiff, George Keepseagle, a citizen of the Standing Rock Sioux Tribe who, along with his wife, Marilyn, filed the lawsuit in 1999, the D.C. Circuit noted.

"The two contending groups – one favoring distribution of all remaining funds to successful claimants, and one favoring no additional distribution – conceded to a middle ground: a limited distribution to successful claimants," Judge Harry T. Edwards wrote for the court in the 31-page opinion.

The late Michael Jandreau, the longtime former chairman of the Lower Brule Sioux Tribe, speaks at the first meeting of the Council for Native American Farming and Ranching in August 2012. The Department of Agriculture established the council as part of the Keepseagle settlement. Photo: Lance Cheung / USDA

But just like some of the plaintiffs weren't happy with the outcome, neither were all of the judges who heard the case. One wrote an unusually lengthy dissent -- at 43 pages, it's even longer than the majority opinion -- that characterized the Keepseagle process as a political charade.

"This settlement — as the more than $380,000,000 remaining for cy pres distribution now confirms — went far beyond compensating injured Native-American farmers; it sought to ensure favored 'nonprofits' and 'charities' were flushed with cash," Judge Janice Rogers Brown wrote in the dissent. Cy pres is the term used to describe the leftover funds.

By distributing the cy pre funds to tribes, non-profits and others, attorneys on both sides of the dispute created a "slush fund" for these entities, she wrote. That goes far beyond the original intent of the lawsuit and usurps the powers of American citizens, she boldly asserted.

"Those allegedly discriminated against have been compensated by the public fisc, and that payment occurred via a process that—while ripe with politics and folly—was ultimately permitted by law," Brown, who was nominated to the federal bench by George W. Bush, wrote. "But, to the extent the government would like to additionally account for this discrimination by funding nonprofits and charities that work to end discrimination against Native Americans, this should be the decision of the people and their elected representatives."

Plaintiffs and attorneys in the Keepseagle lawsuit. Photo by Native Sun News

Judge Robert Wilkins, who agreed with the outcome in the case, wrote a concurring opinion to address what he said was Brown's "tale of corruption and conspiracy." He scoffed at the notion that the process was orchestrated by attorneys to enrich a chosen few.

"It is true that more than half of the settlement fund was not distributed through the claims process and is now poised to be distributed via the cy-près provision," he wrote in the four-page opinion. "But this was an unanticipated state of affairs, not an intended result."

The unusual level of sparring could make the case ripe for a rehearing before a larger panel of judges on the D.C. Circuit. The option is available to Mandan and Tingle but such requests are rarely granted in cases dealing with Indian issues.

An appeal to the U.S. Supreme Court is also possible, a process that might require the new Trump administration to state its views on the matter. But that's also a long shot -- the justices only agree to hear a small number of the thousands of petitions that are filed every year.

Turtle Talk has posted documents from the case, Keepsagle v. Perdue.

D.C. Circuit Court of Appeals Decision:
Keepseagle v. Perdue (May 16, 2017)