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Smallwood v. Yates

United States District Court, District of Columbia

January 30, 2017

WILLIAM H. SMALLWOOD, JR. Plaintiff,
v.
SALLY Q. YATES, Acting Attorney General of the United States, and MICHAEL YOUNG, Acting Secretary of the United States Department of Agriculture, Defendants. [[1]]

          MEMORANDUM OPINION

          REGGIE B. WALTON, United States District Judge

         The plaintiff, William H. Smallwood, Jr., filed his Class Action Complaint ("Compl.") against Loretta E. Lynch, the former Attorney General of the United States, and Tom Vilsack, the former Secretary of the United States Department of Agriculture ("USD A"), seeking declaratory and equitable relief under Section 706 of the Administrative Procedure Act ("APA"), 5 U.S.C. § 706 (2012), based on a settlement agreement between a class of Native American farmers and the USD A that was approved by another member of this Court, see Compl. ¶¶ 1-5, 70-78; see also Order on Plaintiffs' Motion for Final Approval of Settlement, Motion for Approval of Class Representative Service Awards, and Motion for an Award of Attorneys' Fees and Expenses, Keepseagle v. Vilsack, No. 99-3119 (D.D.C. Apr. 28, 2011).[2] Currently before the Court is the defendants' Motion to Dismiss (“Defs.' Mot.”) and the Plaintiff's Motion for Class Certification and Appointment of Class Counsel (“Pl.'s Class Cert. Mot.”). Upon careful consideration of the parties' submissions, [3] the Court concludes that it must grant the defendants' motion to dismiss and thus deny the plaintiff's motion as moot.

         I. BACKGROUND

         A. The Original Keepseagle Settlement Agreement

         On November 24, 1999, a class of Native American ranchers and farmers filed a class action lawsuit against the USDA, alleging “unlawful and invidious discrimination . . . in the [USDA's] administration of the farm loan program.” Compl. ¶ 14. Judge Emmet G. Sullivan of this Court certified the case as a class action pursuant to Federal Rule of Civil Procedure 23(b)(2). See Keepseagle v. Veneman, [4] No. Civ.A.9903119EGS1712, 2001 WL 34676944, at *1 (D.D.C. Dec. 12, 2001). The plaintiff, “a member of the Choctaw Nation of Oklahoma, ” is a member of the Keepseagle class. Compl. ¶ 10.

         In 2011, the parties in Keepseagle reached a class-wide settlement agreement, which Judge Sullivan approved after holding a fairness hearing. See Order, Keepseagle v. Vilsack, No. 99-3119 (D.D.C. Apr. 28, 2011) (granting final approval of the Settlement Agreement); Compl. ¶ 35. The Settlement Agreement “provided for a Total Compensation Fund of $680, 000, 000 drawn from the Judgment Fund, 31 U.S.C. § 1304 [(2012)].” Compl. ¶ 20. Class members could choose between two claim tracks to request a settlement award: “Track A Claimant[s] w[ere] eligible to receive a maximum payment of $50, 000, and [ ] Track B Claimant[s] w[ere] eligible to receive a [maximum] payment of . . . $250, 000.” Id. ¶ 23. The plaintiff “received an award under the . . . Settlement Agreement.” Id. ¶ 10.

         The Settlement Agreement also contained a cy pres provision, which provided that “the Claims Administrator shall direct any leftover funds to the Cy Pres Fund. Class Counsel may then designate Cy Pres Beneficiaries to receive equal shares of the Cy Pres Fund.” Id. ¶ 29. The Settlement Agreement defined a “Cy Pres Beneficiary” as “any non-profit organization, other than a law firm, legal services entity, or educational institution, that has provided agricultural, business assistance, or advocacy services to Native American farmers between 1981 and the Execution Date [of the Settlement Agreement].” Id.

         “As a condition of settlement, class counsel and USDA agreed that the Keepseagle class members had to move for dismissal of the case with prejudice to be effective on . . . the date on which the court entered an order providing final approval of the Settlement Agreement, ” id. ¶ 26, which occurred on April 28, 2011, id. ¶ 35. The class members had 180 days from “the date upon which an order providing final approval of the Settlement became non-appealable” to submit their claims, id. ¶ 26, which occurred on June 27, 2011, see Fed. R. App. P. 4(1)(B)(iii) (stating that a notice of appeal “may be filed by any party within 60 days after entry of the . . . order appealed from if one of the parties is . . . a United States officer or employee sued in an official capacity”); see also Keepseagle v. Vilsack, 307 F.R.D. 233, 238 (D.D.C. 2014) (“No appeal was filed from the Court's approval of the Agreement.”).

         B. The Modified Settlement Agreement

         In August 2013, Keepseagle class counsel informed Judge Sullivan that $380, 000, 711.89 remained in undisbursed settlement funds, Compl. ¶ 37, and “informed the court that they intended to propose a modification of the Settlement Agreement” to establish “a new foundation” because “some of the conditions for the cy pres distribution [were] impractical” due to the unanticipated larger amount of undisbursed funds, id. ¶¶ 38-39. Thereafter, the Choctaw Nation of Oklahoma and the Great Plains Nation filed motions to intervene in the Keepseagle action to object to the proposed modification, id. ¶ 41, which Judge Sullivan denied in November 2014, id. ¶ 43; see also Keepseagle, 307 F.R.D. at 249 (denying the motions to intervene on the ground that the putative intervenors lacked standing).

         Keepseagle class counsel, as well as class representative Marilyn Keepseagle, through separate counsel, filed motions to modify the Settlement Agreement. See Compl. ¶¶ 42, 45. Class counsel's motion “sought immediate distribution of 10% of the undistributed funds to entities meeting certain specified criteria, with the remaining undistributed funds to be placed in trust.” Id. ¶ 42. On the other hand, Ms. Keepseagle's separate motion sought “to either distribute the undisbursed funds pro rata to the successful Keepseagle claimants or alternatively to create a renewed claims process to distribute more of the money to individual class members.” Id. ¶ 45. After a hearing on the motions, Judge Sullivan denied class counsel's initial motion to modify the Settlement Agreement and also Ms. Keepseagle's separate motion for modification, “and requested that the parties attempt to reach a compromise to address the enormous amount of undistributed settlement funds.” Id. ¶ 48.

         In December 2015, “class counsel filed Plaintiffs' Unopposed Motion to Modify the Settlement Agreement Cy Pres Provisions” (the “motion to modify”). Id. ¶ 49. This motion to modify proposed that three class representatives “would each receive $100, 000 for their service to the class; Prevailing Claimants under the Settlement Agreement would each receive an additional $18, 500[;] the IRS would receive $2, 775 on behalf of each Prevailing Claimant; and the remainder of the estimated $380, 000, 000 would be available for cy pres distribution.” Id. ¶ 50. “Ten percent or $38 million would be distributed to unidentified non-profit groups purportedly serving Native American farmers and ranchers prior to November 1, 2010, ” id., and “[a] trust would be created and endowed with the remaining funds to be distributed over a period not to exceed twenty years, ” id.

         Judge Sullivan issued an Order allowing any Keepseagle class member to provide written comments on the motion to modify and speak at the hearing that would be held on the motion. Order at 1-2, Keepseagle v. Vilsack, No. 99-3119 (D.D.C. Dec. 15, 2015). The plaintiff submitted comments in opposition to the proposed modification, see Comments of Class Member William H. Smallwood, Jr. to the Unopposed Motion to Modify Settlement Agreement at 1, Keepseagle v. Vilsack, No. 99-3119 (D.D.C. Jan. 20, 2016) (“[The plaintiff] disagrees with the revised proposal . . . to modify the settlement agreement. His view is that the remaining funds should be distributed to himself and all other Prevailing Claimants in equal amounts.”), and also spoke at the hearing, see Transcript of Motion Hearing Proceedings Before the Honorable Emmet G. Sullivan, United States District Court Judge at 173-75, Keepseagle v. Vilsack, No. 99-3119 (D.D.C. Feb. 4, 2016). On April 20, 2016, Judge Sullivan rejected the plaintiff's position and granted class counsel's motion to modify the Settlement Agreement, see Memorandum Opinion at 29, Keepseagle v. Vilsack, No. 99-3119 (D.D.C. Apr. 20, 2016), and that ruling is currently on appeal before the District of Columbia Circuit, see Keepseagle v. Vilsack, No. 16-5189 (D.C. Cir. July 1, 2016).

         C. ...


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