United States District Court, District of Columbia
WILLIAM H. SMALLWOOD, JR. Plaintiff,
SALLY Q. YATES, Acting Attorney General of the United States, and MICHAEL YOUNG, Acting Secretary of the United States Department of Agriculture, Defendants. []
B. WALTON, United States District Judge
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). 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,  the Court
concludes that it must grant the defendants' motion to
dismiss and thus deny the plaintiff's motion as moot.
The Original Keepseagle Settlement
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,  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.
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.
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.
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
The Modified Settlement Agreement
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).
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. ¶
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.
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,