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COBELL v. NORTON

October 22, 2004.

ELOUISE PEPION COBELL, et al., on her own behalf and on behalf of all those similarly situated, Plaintiffs,
v.
GALE NORTON, Secretary of the Interior, et al., Defendants.



The opinion of the court was delivered by: ROYCE LAMBERTH, District Judge

MEMORANDUM OPINION

This matter comes before the Court on: (1) the Interior defendants' First Submission [2600] in Compliance With May 28, 2004 Memorandum and Order Regarding Historical Statements of Account ("first submission"); (2) the Interior defendants' Second Submission [2628] in Compliance With May 28, 2004 Memorandum and Order Regarding Historical Statements of Account ("second submission"); and (3) the plaintiffs' Motion [2647] for Reconsideration of the Court's May 28, 2004 Order Regarding Historical Statements of Account ("motion for reconsideration"). Related to these matters are: (1) the Interior defendants' Motion [2682] to Strike Plaintiffs' Motion for Reconsideration of the Court's May 28, 2004 Order Regarding Historical Statements of Account and To Admonish Plaintiffs' Counsel to Comply With the D.C. Bar's Voluntary Standards for Civility in Professional Conduct ("motion to strike"); (2) the Plaintiffs' Proposed Notice [2725] for Communications to Individual Indian Trust Beneficiaries submitted pursuant to this Court's September 29, 2004 Order as clarified by this Court's October 1, 2004 Order ("plaintiffs' proposed notice"); (3) the Interior Defendants' Proposed Notices [2724] for Class Communications submitted pursuant to this Court's September 29, 2004 Order as clarified by this Court's October 1, 2004 Order ("defendants' proposed notice"); and (4) the Interior defendants' Proposed Order [2735] in further clarification of the Court's Order issued September 29, 2004, as clarified by the Court's Order of October 1, 2004 ("defendants' proposed order").

After the Interior defendants filed the first submission, the plaintiffs filed both their motion for reconsideration and a response to the first submission that is "identical in substance" to the plaintiffs' motion for reconsideration. See Plaintiffs' Resp. [2649] to Def.'s First Submission in Compliance With May 28, 2004 Order Regarding Historical Statements of Account, at 2. The Interior defendants filed a brief in opposition and a motion to strike the motion for reconsideration; and the plaintiffs filed a reply to the defendants' opposition brief, as well as their own brief in opposition to Interior's motion to strike.

  Upon consideration of these filings, oppositions thereto, the reply briefs, the applicable law, and the record herein, the Court finds that the matters at issue here will be resolved in the following way. First, Interior's first submission will be APPROVED IN PART AND DENIED IN PART, and Interior's second submission will be APPROVED, subject to the conditions set forth in this Opinion and the accompanying Order issued this date. Second, the plaintiffs' motion for reconsideration will be DENIED. Third, Interior's motion to strike will be DENIED. Fourth, a modified version of the plaintiffs' and defendants' proposed notices will be APPROVED for inclusion in communications with individual Indians regarding the sale, exchange, transfer, or conversion of Indian trust land Fifth, a modified version of the Interior defendants' proposed order will be incorporated into the Order issued this date. The Court's reasoning is set forth below.

  BACKGROUND

  The factual background of this case having been set forth at great length in previous Opinions of both this Court and the Court of Appeals, see, e.g., Cobell v. Norton, 240 F.3d 1081, 1086-94 (D.C. Cir. 2001), the Court will save paper by not restating it here. For these purposes, a more limited history will suffice.

  On October 9 and 28, 2002, Interior mailed historical statements of account ("statements") to 1,208 holders of Individual Indian Money Trust ("IIM") accounts. Each statement was accompanied by a cover letter containing the following language:
If you have concerns about the Historical Statement of Account included with this letter or if you believe it is in error, yo may wish to file a challenge with OHTA [the Office of Historical Trust Accounting]. . . . 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].
  Upon the plaintiffs' motion, this Court examined whether this language attached to the statements would adversely affect rights of plaintiff class members who received statements. In a Memorandum and Order issued December 23, 2002, the Court found that Interior's "ticking clock" for appealing the account statements effectively extinguished the rights of plaintiff class members to the historical accounting of trust assets to which they are entitled as a result of this litigation. To prevent undue interference with class members' rights, the Court entered an Order pursuant to Federal Rule of Civil Procedure 23(d) restricting communications between Interior and class members until the Court approved a notice to be included with future communications. See Cobell v. Norton, 212 F.R.D. 14, 20-21 (D.D.C. 2002).

  On February 7, 2003, Interior filed a motion requesting authority to communicate with class members, seeking leave from this Court to send statements to 14,235 IIM account holders. Interior submitted a proposed notice to accompany the statements, intended to offset the problems the Court noted concerning the "60 day appeal period" language originally included with such statements. The Court granted in part and denied in part Interior's motion. The Court found that while the language of the notice that Interior proposed to send to IIM account holders who are also members of the plaintiff class was adequate to inform class members of their rights in this litigation, Interior's ability to determine which of the proposed account-holder recipients were also class members was suspect. See Memorandum and Order, Issued May 28, 2004, at 2-3. Therefore, the Court ordered that Interior could mail the 14,235 historical statements of account, but that Interior had to include the proposed notification with all statements mailed. Furthermore, the Court ordered that Interior would have to submit its statements as revised to include the specified notice and obtain final approval from the Court both to mail the 14,235 statements at issue in the May 28, 2004 Memorandum and Order and for any future mailings of additional statements to additional IIM account holders. See id. at 5-6. The Court also ordered that supplemental notice regarding this litigation and the rights of class members be sent to the 1,208 IIM account holders who had already received statements from Interior, after final approval of the proposed notification by the Court. Id. at 6.

  In its May 28, 2004 Memorandum and Order, the Court approved the following notice to accompany historical statements of account mailed to IIM holders.

 
Please be aware that the account holder for whom this historical statement of account was prepared may be a member of a class action lawsuit, Cobell v. Norton, No. 1:96CV01285 (D.D.C.) (Judge Lamberth). Nothing in this notice should be interpreted as eliminating any rights that the account holder may have if they are a class member in that litigation. If the account holder is a class member and fails to challenge this historical statement of account they do not lose any rights that they have as a class member. For further information you may contact the lawyers for the class members: Dennis M. Gingold, Esq., 607 14th Street, N.W., 9th Floor, Washington, DC 20005, phone: (202) 824-1448, fax: (202) 318-2372, email: dennismgingold@aol.com, or Keith Harper, Esq., Native American Rights Fund, 1712 N Street N.W., Washington, DC 20036-2976, phone: (202) 785-4166, fax: (202) 822-0068, email: harper@narf.org. You may also access further information at the plaintiffs' website, www.indiantrust.com.
The Court found that because Interior could not explain to the Court's satisfaction how it intended to identify which IIM account holders are also class members, this notification must accompany all statements mailed to IIM account holders, class member or not.*fn1 Furthermore, the Court approved the following notice to be sent to those 1,208 IIM account holders who received historical statements of account before the notification issue reached the Court.
 
Please be aware that many Individual Indian Money account holders are members of a class action lawsuit, Cobell v. Norton, No. 1:96CV01285 (D.D.C.) (Judge Lamberth). In October 2002, the above referenced account holder received a Historical Statement of Account, along with a cover letter notifying the account holder of the action they should take if they wanted to challenged the accuracy of that statement. Nothing in that notice should be interpreted as eliminating any rights that the account holder may have if they are a class member in that litigation. If the account holder is a class member and fails to challenge this historical statement of account they do not lose any rights that they have as a class member. For further information you may contact the lawyers for the class members: Dennis M. Gingold, Esq., 607 14th Street, N.W., 9th Floor, Washington, DC 20005, phone: (202) 824-1448, fax: (202) 318-2372, email: dennismgingold@aol.com, or Keith Harper, Esq., Native American Rights Fund, 1712 N Street N.W., Washington, DC 20036-2976, phone: (202) 785-4166, fax: (202) 822-0068, email: harper@narf.org. You may also access further information at the plaintiffs' website, www.indiantrust.com.
  Pursuant to the Court's May 28, 2004 Memorandum and Order, Interior made two submissions requesting authorization to mail out statements to IIM account holders. The Interior defendants' first submission, filed June 22, 2004, requested permission to mail statements bearing the above recited notice to 17,096 IIM account holders, presumably the 14,235 IIM account holders at issue in the Court's May 28, 2004 Memorandum and Order and 2,861 additional IIM account holders. Interior's first submission further indicated that "[a]n additional 8,435 historical statements of account are expected to be completed by July 6, 2004." The Interior defendants' second submission, filed August 18, 2004, requested permission to send the above-recited notice to the 1,208 IIM account holders who are already in receipt of statements from Interior. These two submissions by Interior incited most of the flurry of motions and briefing discussed at the outset of this Opinion.
  Additionally, in a matter substantially related to the foregoing, on August 25, 2004 the plaintiffs filed a motion for a preliminary injunction to prevent Interior from communicating with class members in connection with the sale, exchange, transfer, or conversion of Indian trust land in a manner that endangers class members' rights. The Court held a hearing and found that, like the statements, the land-sale related communications did in fact threaten to extinguish rights of plaintiff class members. Therefore, the Court issued an Order on September 29, 2004, again pursuant to Federal Rule of Civil Procedure 23(d), requiring that Interior cease all communications with class members related to the sale, exchange, transfer, or conversion of Indian trust land until such time as the Court approved a notice to accompany all such communications going forward. At the request of the defendants but for no ascertainable reason other than appeasement, the Court issued an Order on October 1, 2004, clarifying that the September 29, 2004 Order indeed applies only to communications between "the defendants, their agents, representatives, employees, officers, and counsel and members of the plaintiff class that are related to the sale, exchange, transfer, or conversion of Indian trust land" Order, issued Oct. 1, 2004 (clarifying the Court's Sept. 29, 2004 Order).*fn2 The Court further ordered that:
henceforth, communications between the Interior defendants, their agents, representatives, employees, officers, and counsel and members of the plaintiff class that are related to the sale, exchange, transfer, or conversion of Indian trust land may proceed only if a Court-approved version of the above-described notice is conspicuously displayed on such communications and then only between the Interior defendants, their agents, representatives, officers, and counsel and plaintiffs' counsel unless the class member with whom communication is sought has waived his or her right to consult class counsel, in which case communication may proceed between the Interior defendants, their agents, representatives, employees, officers, and counsel and the individual class member.
Order issued Oct. 1, 2004 (clarifying Order issued Sept. 29, 2004).

  Pursuant to these Orders, the parties submitted their respective proposals for the form of notice to accompany communications between Interior and class members related to the sale, exchange, transfer, or conversion of Indian trust land Subsequently, Interior demonstrated on several occasions that it was unable to properly implement the Court's Order.

  It came to the Court's attention that, initially, Interior felt that compliance with the September 29, 2004 Order required Interior to shut down the Bureau of Indian Affairs entirely. Field offices were closed and notices were affixed to their doors explaining that no business could be conducted due to this Court's Order of September 29, 2004; and apparently all live telephone operators were replaced with a recorded message of the same stripe. Most appallingly, the entire process by which payments are made to IIM account holders from lease revenues, royalties, and so forth was similarly shut down. These actions, of course, were taken pursuant to a deliberate, infantile, and frankly ridiculous misinterpretation of this Court's straightforward Order.

  Although the Secretary claims that she orally ordered that no payments to Indians be withheld, her initial written instructions to Interior employees were silent on the issue. Further, the tenor of the Secretary's instructions apparently led many employees to hold payments and, in numerous cases, to tell the Indian beneficiaries that their checks were being withheld as a direct result of this Court's Order. As the Court forcefully explained to the Secretary's counsel at a hearing held by the Court on October 1, 2004, such statements were lies. The Secretary's addition, in her instructions promulgated to Interior on September 30, 2004, of items 2 through 8 on the list of subjects of communication between Interior and Indians restricted by this Court's Order,*fn3 before seeking any clarification from the Court, is yet another example of how the Secretary treats these Indian beneficiaries — one so far beyond the pale that it led the Court to inquire of defense counsel whether the Secretary had "decided to declare war on the Indians that brought this case[.]" Tr. at 9 (Hearing of Oct. 1, 2004).

  The Secretary's claim that she was unsure what the Court intended in its September 29, 2004 Order is now, as it was then, totally bogus. What is clear is that the Secretary, in a fit of pique and perhaps anger at both the Court and the plaintiffs for the issuance of the September 29 Order, simply retaliated against the Indian beneficiaries under the thin disguise of a preposterous and facially false "interpretation" of the Court's Order. That this "interpretation" was not crafted in good faith is clear, but the Secretary's motive for her bad faith interpretation and retaliation passes understanding.

  The plaintiffs requested several emergency hearings in response to Interior's actions, at which little was resolved. Finally, at a status conference held by the Court on October 19, 2004, the Court instructed Interior to submit a proposed Order in further clarification of the Court's September 29, 2004 Order as clarified by the Court's October 1, 2004 Order. The Court hopes that this further clarification will eliminate any remaining avenues for misinterpretation of this Court's Orders by Interior and stymie further inappropriate conduct that might be undertaken as a result.

  DISCUSSION

  A. The Plaintiffs' Motion for Reconsideration

  As there seems to be significant confusion with respect to the proper legal standard governing the present motion for reconsideration, the Court will first carefully explain the applicable law.

  1. Legal Standard

  The Court's May 28, 2004 Memorandum and Order at issue here is clearly interlocutory in nature — it merely carried out the conditions of the Court's December 23, 2002 Memorandum and Order restricting communication between Interior and members of the plaintiff class and did not purport to dispose of any aspect of this litigation on the merits. Therefore, Federal Rule of Civil Procedure 54(b), rather than Rule 60(b), must provide the relevant standard for reconsidering the Court's May 28, 2004 Memorandum and Order. See FED. R. CIV. P. 60(b) ("On Motion . . . the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding. . . .") (emphasis added); see also FED. R. CIV. P. 59(e) (authorizing motions to reconsider final judgments); Dellums v. Powell, 566 F.2d 231, 234 (D.C. Cir. 1977) ("Rule 60(b) applies only to modifications of final judgments."). The standard governing reconsideration under Rules 59(e) and 60(b) requires a court to find "an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." APCC Servs., Inc. V. AT&T Corp., 281 F. Supp. 2d 41, 44 (D.D.C. 2003) (quoting Campbell, 231 F. Supp. 2d at 7).

  Rule 54(b) governs reconsideration of orders that do not constitute final judgments in a case. See Campbell v. United States Dep't of Justice, 231 F. Supp. 2d 1, 6 n. 8 (D.D.C. 2002) (Rule 54(b) "addresses interlocutory judgments"); Moore v. Hartman, 2004 WL 1921964 at *3 (D.D.C. 2004) (explaining that Rule 54(b) governs the disposition of requests for reconsideration of interlocutory orders); APCC Servs., 281 F. Supp. 2d at 44 (same). Rule 54(b) provides, in relevant part, that: any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties . . . is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

 FED. R. CIV. P. 54(b).

  Importantly, the standard for reconsideration of interlocutory orders under Rule 54(b) is distinct from the standard applicable to motions for reconsideration of final judgments. The precise standard governing Rule 54(b) reconsideration is unsettled in our Circuit, but it is clear that "courts have more flexibility in applying Rule 54(b)" than in determining whether reconsideration is appropriate under Rules 59(e) and 60(b). Moore, 2004 WL 1921964 at *3. For example, our Court has held that Rule 54(b) reconsideration may be granted "as justice requires." APCC Servs., 281 F. Supp. 2d at ...


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