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Cobell v. Norton

March 3, 2003


The opinion of the court was delivered by: Royce C. Lamberth United States District Judge


This matter comes before the Court on defendants' motion for reconsideration of the Court's December 23, 2002 order prohibiting communications with class members pursuant to Rule 23(d) of the Federal Rules of Civil Procedure [1715-1], which was filed on January 8, 2003. Upon consideration of defendants' motion, defendants' reply brief, *fn1 and the applicable law in this case, the Court finds that defendants' motion should be denied.

Defendants have brought this motion under Rule 59(e) of the Federal Rules of Civil Procedure, which provides that "[a]ny motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment." However, the December 23 order was not a final judgment by this Court, but an interlocutory order. Defendants suggest that the Court construe defendants' motion as having been brought under to the Court's inherent power to reconsider its own interlocutory orders. Defs.' Reply Br. at 2. Defendants cite the following observations made by this Court in a memorandum and order dated September 17, 2002:

District courts have broad discretion to grant or deny a motion for reconsideration. The court may invoke its discretion and deny such a motion unless it finds an intervening change in controlling law, the availability of new evidence, or the need to correct clear error or manifest injustice. Cobell v. Norton, 226 F.Supp.2d 175, 177 (D.D.C. 2002) (citations omitted).

However, defendants have failed to direct this Court to any relevant changes in the law since December 23, proffered any new evidence, or convinced the Court that reconsideration of its order is necessary to correct a clear error or manifest injustice. Instead, defendants absurdly maintain that the notices in the account statements they mailed to class members did not constitute communications concerning the subject matter of the representation. Defendants also announce to this Court that, despite having found reliable evidence indicating that defense counsel violated ethics rules through its participation in the efforts to produce the account statements, its referral of defense counsel to the Disciplinary Panel is "without foundation." Interior Defs.' Mot. for Reconsideration of Order Prohibiting Communications with Class Members ("Mot. to Reconsider") at 3.

But the only thing that defendants' motion demonstrates is that defendants have fundamentally misunderstood this Court's December 23 opinion. In order to avoid further misunderstanding, the Court will explain the findings of fact and the legal conclusions that it made in that opinion.

The first paragraph of the notices that defendants mailed to the class members declared that "DOI's Office of Historical Trust Accounting (OHTA) recently performed an accounting of this account from the time it was open through December 31, 2000." Under the heading "What You Should Do Next," the notice repeated that "OHTA completed the enclosed Historical Statement of Account for the time from the opening of the account through December 31, 2000," and then announced:

If you have concerns about the Historical Statement of Account included with this letter or if you believe it is in error, you may wish to file a challenge with OHTA . . . . . If you do not challenge the historical account statement or request an extension within 60 calendar days of the postmark on the envelope containing this letter, the enclosed Historical Statement of Account will be final and cannot be appealed. . . . You may appeal OHTA's final response to the Interior Board of Indian Appeals (IBIA) by filing a Notice of Appeal with IBIA within 30 calendar days of the date you receive OHTA's response. [emphasis in original].

Defendants now claim that "[t]he notification made clear that recipients could bring to Interior's attention any information they believed relevant within a sixty-day period. Following that period, Interior would treat the individual accountings as final, absent further orders in this litigation calling into question that validity of the accountings under applicable statutory standards." Mot. to Reconsider at 9. The Court will set aside for a moment the issue of whether defendants did not intend the notices to preclude judicial review of defendants' administrative proceedings, a statement that the Court finds extremely dubious. Regardless of defendants' purported intent, the fact remains that without having obtained the consent of the Court, defendants mailed notices to class members that affected the rights of the class members to a full and accurate historical accounting - the very claims that lie at the heart of Phase II of this litigation. Defendants thus altered the class members' rights to a full accounting by subjecting the historical statements of account that the members had received to an administrative appeals process, without having consulted the Court about the changes that defendants were proposing. Thus, even if the notices could be considered to be legally accurate, it was improper for defendants to have sent them without first obtaining the Court's approval.

But the notices, in fact, were not accurate because they failed to inform the class members of their rights in this litigation. In their supplemental opposition brief, defendants complain that it might have been "misleading" for them to have mentioned this litigation in the notices. Defs.' Supp. Opp. Br. at 8. But defendants were not without recourse in this matter. The proper course of action would have been for defendants to file a motion requesting an order from this Court finding that their proposed communications with class members would not violate the ethical rules prohibiting contact with represented parties, precisely as they did in March 2000 and December 2001, when administrative processes they were contemplating involved contacts with class members. Defendants could have waited until the Court had ruled on plaintiffs' motion for a temporary restraining order and preliminary injunction against the transmission of the account statements. At the very least, given that defendants purport to have had the best interest of the class members at heart, defendants could have consulted with class counsel about the notices they were planning to send out. It is true that defendants alleged that they were concerned about potential Privacy Act violations, but defendants nevertheless were too impatient to wait for this Court's ruling on their motion that had raised those concerns. *fn2

In their supplemental opposition brief, defendants claim that their March 2000 and December 2001 motions were only filed "out of an abundance of caution." Id. at 3 n.3. A dose of that caution would have served defendants well in this matter. Rather than filing a motion for an order permitting them to transmit the account statements, or even waiting for the Court to rule on the pending motions dealing with these statements, defendants went ahead and mailed out over a thousand statements to class members, so that they could issue a press statement lauding their own valiant efforts at trust reform. See Pls.' Notice of Supp. Authority in Support of Mot. for TRO and Prelim. Inj., Exh. 1. Indeed, in their surreply brief, defendants announce that "Interior opposes withholding the statements from the account holders while waiting for Court and Plaintiffs' counsel 'approval' of them." Defs.'

THE COURT: But they didn't consent, so why didn't you let the Court rule on it before you acted?

MR. SELIGMAN: Well, there was quite a bit of time went by, Your Honor.

THE COURT: Well, you know, I'm in a murder trial with 31 murders. It's not like I have nothing to do but this Indian case. Transcript of Motions Hearing, Nov. 1, 2002, at 17-18.

In fact, the record of this case shows that defendants waited all of thirteen days after their motion for an order permitting them to provide copies of the account statements to plaintiffs' counsel was ripe before mailing out the statements to the class members.

Nevertheless, defendants include the following as a "statement of fact" in their motion for reconsideration: "[P]laintiffs' counsel opposed Interior's motion and sought a temporary restraining order and a preliminary injunction preventing Interior from distributing these account statements on the ground that they would be misleading. . . . This Court did not rule on plaintiffs' request for injunctive relief." Mot. to Reconsider at 3-4. What defendants mean by this last sentence is unclear. Apparently, defendants are implying that if the Court does not rule on a motion within three weeks of the time that it was filed, defendants are free to conclude that the Court will not be ruling on the motion at all. The Court is admittedly intrigued by the implications of this theory of "judicial estoppel." The logical corollary of this argument is that because defendants have failed to act since 1887, the Court may assume that they will not act at all, and enter a default judgment for plaintiffs. Surreply at 6 n.8.

Defendants thus have only themselves to blame for the consequences of their impatience and obstinacy.

As noted above, defendants allege that the notices included with the account statements stating that the rights of the class members to appeal the account statements they had received would be lost unless the members objected within sixty days were never intended to supplant any remedy that the Court might order in Phase II of this litigation. The Court has just explained why defendants' purported intentions are irrelevant. But even assuming that these intentions mattered, the weight of the evidence suggests that defendants never intended these notices to be anything but an attempt to extinguish the rights of the class members without the possibility of judicial review. For one, their statements to this Court during oral argument contain not the slightest hint that any other message was ever intended. During the hearing on plaintiffs' motion for a preliminary injunction, the Court raised this very issue with defense counsel:

THE COURT: Well, where did this regulation come in that they lose all their rights after 60 days once they get this? Where did that come up, then? MR. SELIGMAN: Well, my understanding is that there was already a procedure in place for appeals from Bureau of Indian Affairs' hearings, and the regulation that has been proposed now is basically to allow the Office of Hearings and Appeals to go ahead and hear these types of appeals, basically in an effort to try to narrow any possible disputes they might have. The typical -

THE COURT: And to extinguish the rights of anybody that doesn't file the appeal in 60 days -


THE COURT: - which are class members; right?

MR. SELIGMAN: Well, yes.

THE COURT: So you're going to have class members lose all their rights in 60 days with a notice from you with no notification to plaintiffs' counsel and no notification to the Court; is that what you propose?

MR. SELIGMAN: Well, the proposal was to be able to give notification, and that's why we filed this motion. Transcript of Motions Hearing, Nov. 1, 2002, at 5-6.

Thus, in response to the Court's inquiry, defense counsel pointed to the fact that in September, defendants had filed a motion for an order permitting defendants to provide class counsel with copies of the statements of account that they were planning to send out. But defense counsel never contradicted the Court's assertions that class members would lose their rights to appeal the historical accountings provided by defendants if the members did not ...

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