Elouise Cobell v. Sally Jewell , 802 F.3d 12 ( 2015 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 20, 2015 Decided September 18, 2015
No. 14-5119
ELOUISE PEPION COBELL, ET AL.,
APPELLANTS
v.
SALLY JEWELL, SECRETARY OF THE INTERIOR, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:96-cv-01285)
David C. Smith argued the cause for appellants. With
him on the briefs were William E. Dorris, Adam H. Charnes,
and Elizabeth L. Winters.
Stephen J. Vaughan was on the brief for amicus curiae
Indian Land Tenure Foundation in support of appellants.
Alisa B. Klein, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Ronald C. Machen, Jr., U.S. Attorney at the time the brief
was filed, and Beth S. Brinkmann, Deputy Assistant Attorney
General, and Mark B. Stern, Attorney.
2
Before: HENDERSON and MILLETT, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge MILLETT.
MILLETT, Circuit Judge: This is the eleventh appeal to
this court in nearly two decades of litigation arising out of the
Department of the Interior’s misadministration of Native
American trust accounts and an ensuing complex, nationwide
litigation and settlement. As the case winds down, the class
action representatives have appealed the district court’s denial
of compensation for expenses incurred during the litigation
and settlement process.
We affirm the district court’s denial of additional
compensation for expenses for the lead plaintiff, Elouise
Cobell, because the district court expressly wrapped those
costs into an incentive award given to her earlier. We
conclude, however, that the district court erred in
categorically rejecting as procedurally barred the class
representatives’ claim for the recovery of third-party
payments, and remand for the district court to apply its
accumulated expertise and discretion to the question of
whether third-party compensation can and should be paid
under the Settlement Agreement.
I
Background
This long-running litigation saga has been documented in
numerous decisions of this court over the course of multiple
appeals. See Cobell v. Kempthorne, 455 F.3d 317, 330–331
(D.C. Cir. 2006) (cataloging this court’s decisions in eight
appeals); Cobell v. Salazar, 573 F.3d 808 (D.C. Cir. 2009);
Cobell v. Salazar, 679 F.3d 909 (D.C. Cir. 2012).
3
In brief, five named plaintiffs (“Class Representatives”)
initiated a class action lawsuit in 1996 seeking to compel the
United States Department of the Interior to perform a
historical accounting of the hundreds of millions of dollars
held by the Department in trust for Native Americans. That
accounting was required by the American Indian Trust Fund
Management Reform Act of 1994, Pub. L. No. 103-412, 108
Stat. 4239. In 2001, we affirmed the district court’s
conclusion that the Department had unreasonably and
unlawfully delayed that statutorily mandated accounting.
Cobell v. Norton, 240 F.3d 1081, 1105 (D.C. Cir. 2001). For
the next decade, the parties, the district court, and Congress
all struggled to determine how the Department could feasibly
discharge its legal duty to conduct an accounting of the
hundreds of thousands of “Individual Indian Money” trust
accounts under its control. That would have been a herculean
task under the best conditions, but the difficulty of the
Department’s charge was compounded by its unreliable
records of the identity and location of the original account
holders, more than a century of deficient bookkeeping by the
Department, and decades of “fractionation” as allotment
interests passed from one generation to the next. See Cobell
v. Kempthorne, 569 F. Supp. 2d 223, 226–227 (D.D.C. 2008)
(chronicling the accounting problems associated with
maintaining a “121-year old perpetual trust, managed by civil
servants, with rapidly multiplying beneficiaries and a variety
of ever-changing assets”), vacated and remanded by Cobell v.
Salazar, 573 F.3d 808 (D.C. Cir. 2009). 1
1
“Fractionation” occurs when “Indian allotments are divided and
divided again by inheritance through succeeding generations.”
Cobell v. Kempthorne, 532 F. Supp. 2d 37, 41 (D.D.C. 2008),
vacated and remanded by Cobell v. Salazar, 573 F.3d 808 (D.C.
Cir. 2009).
4
We pick up the story in 2010 with the enactment of the
Claims Resolution Act (“Claims Act”), Pub. L. No. 111-291,
124 Stat. 3064 (2010). The Claims Act authorized, ratified,
and confirmed the parties’ comprehensive Settlement
Agreement resolving the class action litigation. See id.
§ 101(c)(1). The Claims Act also referenced a separate
agreement on attorneys’ fees, costs, and expenses that the
parties had negotiated (“Fee Agreement”). Id. § 101(a).
Under the Settlement Agreement, each member of what
was known as the “Historical Accounting Class” received
$1,000 in lieu of an actual accounting. The money would
come from the Accounting/Trust Administration Fund, which
was to be created by the government’s payment of $1.412
billion into a settlement account. See Cobell v. Salazar, 679
F.3d 909, 914 (D.C. Cir. 2012). 2 A separate class, known as
the “Trust Administration Class,” received a baseline payment
of $500 and a prorated share of any funds left over in the
settlement account after specified payments were made,
including attorneys’ fees and awards to the Class
Representatives. Id. at 914–915. In exchange, all class
members released the Department of Interior from liability
arising out of prior mismanagement of their trust accounts.
2
The “Historical Accounting Class” consisted of individual Indian
beneficiaries who had an Individual Indian Money account (with at
least one cash transaction) between October 25, 1994 (the
enactment date of the American Indian Trust Fund Management
Reform Act) and September 30, 2009 (the “Record Date” of the
parties’ Settlement Agreement). This class did not include account
holders who had filed an individual claim for a historical
accounting prior to the filing of the parties’ original complaint.
Settlement Agreement ¶ A.16.
5
Id. 3 Plaintiffs inform us that, to date, “91% of all settlement
funds have been distributed.” Cobell Supp. Br. 4.
The Settlement Agreement separately provided for the
recovery of “attorneys’ fees, expenses, and costs” “for Class
Counsel.” Settlement Agreement ¶ J(1). The Agreement
required the Class Representatives to file a notice with the
district court, prior to the preliminary hearing on approval of
the Settlement Agreement, that would disclose the up-to-date
amount of attorneys’ fees, expenses, and costs requested. Id.
¶ J(2). Post-settlement amounts were governed by a separate
procedure. Id. ¶ J(4). The Settlement Agreement further
provided that the amount ultimately to be awarded would be
“within the discretion of the [District] Court in accordance
with controlling law[.]” Id. ¶ J(5).
The Fee Agreement mirrored that structure, separating
pre- and post-settlement requests for attorneys’ fees,
expenses, and costs. Fee Agreement ¶¶ 4–5. In the Fee
Agreement, the plaintiffs agreed not to seek more than $99.9
million above amounts previously paid by the government,
and the government agreed that it would not argue for less
than $50 million above those amounts. Id. at ¶ 4(a)–(b).
The Claims Act also authorized the district court to grant
“incentive awards” to the Class Representatives. Claims Act
3
The “Trust Administration Class” included individual Indian
beneficiaries who had Individual Indian Money accounts between
1985 and the date of the proposed amended complaint, as well as
individuals who, as of the Record Date, “had a recorded or other
demonstrable ownership interest in land[.]” Settlement Agreement
¶ A.35. This class excluded those who, prior to the filing of the
amended complaint, had filed actions on their own for claims that
otherwise would have fallen under the claim release entered into by
the Trust Administration Class. Id.
6
§ 101(g)(1). The Settlement Agreement that was ratified and
confirmed by the Claims Act, see id. §§ 101(a)(8), (c)(1),
elaborated that the “petition for incentive awards” shall
“includ[e] expenses and costs[] of the Class Representatives.”
Settlement Agreement ¶ K.2. The Settlement Agreement
recorded the plaintiffs’ estimate that the total amount of the
expenses and costs requested would be “in the range of $15
million above those paid by Defendants to date.” Id. ¶ K.1.
In January 2011, the plaintiffs filed both a Petition for
Class Counsel’s Fees, Expenses and Costs Through
Settlement, and a Petition for Class Representatives’ Incentive
Awards and Expenses. In the Attorneys’ Fees Petition, the
plaintiffs requested $99.9 million in attorneys’ fees “in
accordance with the literal provisions” of the Fee Agreement,
but argued “that a fee award of $223 million, plus expenses
and costs of $1,276,598, is in accordance with controlling law
and within this Court’s discretion.” J.A. 748. The
government argued that the total award should be limited to
$50 million.
In the Incentive Awards Petition, the Class
Representatives requested a total of $2.5 million in incentive
awards for themselves, and an additional $10.5 million in
“reimbursement” for expenses and costs incurred in
prosecuting the litigation. The government contended that the
Class Representatives should not receive more than a total
award of $1 million to cover both personal expenses and
incentives. The government also argued that the additional
$10.5 million should be denied because it was for the
expenses of third parties, not those of the Class
Representatives.
The district court held a fairness hearing on June 20,
2011. At the close of the hearing, the court granted four of
7
the Class Representatives a total of $2.5 million in incentive
awards. 4 But the court denied their separate request for
reimbursement of expenses and costs. With respect to the
$390,000 that Ms. Cobell said she had spent out of her
personal funds, the district court ruled that amount should be
reimbursed “out of her sizeable” $2 million “incentive
award.” J.A. 1761. The court then denied the additional
$10.5 million in requested expenses on the ground that the
expenses were not incurred by the Class Representatives, and
the court otherwise lacked authority to award expenses paid
by third parties. The court also awarded $99 million in
“attorneys’ fees, expenses and costs.” J.A. 1763.
The plaintiffs filed a motion for reconsideration relating
to the denial of expenses on June 27, 2011, one week after the
court’s oral ruling at the fairness hearing, but before the
district court entered a written order reflecting its rulings.
On July 27, 2011, the district court entered a written
order granting final approval to the settlement and setting
forth the rulings made during the fairness hearing. That order
reflected the grant of incentive awards to the four Class
Representatives, and the denial of an additional $10.5 million
in expenses “because plaintiffs have not shown that these are
expenses or liabilities of the Class Representatives.” J.A.
1790. The written order made clear that the plaintiffs’
pending motion for reconsideration would “be the subject of a
further order,” and otherwise made no reference to its
authority to reimburse third-party expenses incurred by Class
4
The court denied any incentive award for the fifth Class
Representative, Earl Old Person, because he had been removed in
2003 for failing to satisfy his duties as a class representative. J.A.
1761.
8
Representatives or Class Counsel. J.A. 1790 n.2. The district
court entered final judgment on August 4, 2011.
Two years later, the plaintiffs filed a “Notice of
Supplemental Information and Correction” amending their
still-undecided motion for reconsideration of the denial of
expenses. The Notice included exhibits and “correct[ed]” the
amount sought by adding a nearly $500,000 loan from the
Indian Land Tenure Foundation to the Blackfeet Reservation
Development Fund. J.A. 1796.
On October 16, 2011, the lead plaintiff, Elouise Cobell,
died. Counsel did not substitute her estate or anyone else in
her place prior to the district court’s decision or the filing of a
notice of appeal.
Almost three years after the motion for reconsideration
was originally filed, the district court denied reconsideration.
Cobell v. Jewell, 29 F. Supp. 3d 18, 19 (D.D.C. 2014).
Viewing the plaintiffs’ motion as a Rule 59(e) post-decisional
motion, the district court first held that the argument that the
Class Representatives were personally liable for some of the
$10.5 million in requested expenses was procedurally barred
because they could—and should—have raised that new
argument before the court ruled on the Class Representatives’
petition. See id. at 23. The court further ruled that, even if
the claim were properly before it, the plaintiffs had failed to
show that the Class Representatives were in fact personally
liable for the claimed expenses. See id. at 23–25. Instead, the
district court concluded that those expenses, if recoverable at
all, were payable out of the $99 million award for Class
Counsels’ fees, expenses, and costs. Id. at 24–25. Finally,
the district court declined to consider as untimely raised an
argument that the Settlement Agreement provided for
payment of third party costs and expenses “wholly
9
independent of, and in addition to, expenses and costs of
Class Counsel.” Id. at 25.
The plaintiffs filed a notice of appeal from both the
original July 27, 2011, written order and the denial of
reconsideration.
II
Jurisdictional Analysis
Before we can proceed to the merits of the appeal, we
must be confident of our authority to decide the case at all,
whether or not jurisdictional challenges are pressed by a
party. See, e.g., City of New York v. National R.R. Passenger
Corp., 776 F.3d 11, 14 (D.C. Cir. 2015).
Timeliness of Appeal
The government’s opening brief hinted that the appeal is
jurisdictionally barred as untimely, while its post-argument
supplemental brief offered a more full-throated timeliness
objection. The argument turns on the differing operations of
Federal Rules of Civil Procedure 54(b) and 59(e). In brief,
when cases involve multiple parties or multiple claims, Rule
54(b) allows a litigant to move for reconsideration or
modification of a district court’s interlocutory order disposing
of “fewer than all the claims or the rights and liabilities of
fewer than all the parties” “at any time” before the court’s
entry of final judgment. Because Rule 54(b) operates while a
case is still ongoing in district court and before any appealable
final judgment has been entered, such motions for
reconsideration, of course, do not toll the time for taking an
appeal because the clock has not even started ticking. See,
e.g., Goodman v. Johnson, 471 F. App’x 114, 2012 WL
1111106, at *1 (4th Cir. April 4, 2012) (A “motion seeking
10
reconsideration, filed under Fed. R. Civ. P. 54(b), [does] not
qualify to toll the thirty-day time limit.”); Schaeffer v. First
Nat’l Bank of Lincolnwood, 465 F.2d 234, 236 (7th Cir. 1972)
(Fed R. App. P. 4(a) “provides that certain motions, not
including motions for a Rule 54(b) order, toll the running of
[the period in which to notice an appeal] during their
pendency.”).
Rule 59(e), in contrast, is a motion for reconsideration
that is filed only after the district court’s entry of a final
judgment. Because the entry of a final judgment starts the
time running on the filing of an appeal, a Rule 59(e) motion
stops the appeal clock until after the motion is decided. See
Fed. R. App. P. 4(a)(4)(A); Center for Nuclear Responsibility,
Inc. v. United States Nuclear Regulatory Comm’n, 781 F.2d
935, 940 (D.C. Cir. 1986). 5
The Class Representatives’ notice of appeal was
unquestionably timely to appeal the March 20, 2014, order
denying reconsideration of the claims for expenses. The
question is whether they could also appeal the July 2011 order
and August 2011 judgment that first denied the expense
awards.
The government’s initial brief suggested that, given the
passage of time, the plaintiffs could only appeal the July 2011
order if their motion for reconsideration were brought under
5
Adding to the layers, Federal Rule of Civil Procedure 58(e)
permits a district court to treat a timely motion for attorneys’ fees as
a Rule 59 motion tolling the time to file an appeal. See Fed. R. Civ.
P. 58(e). A district court must affirmatively order such treatment
before the time that a notice of appeal becomes effective, however,
and no such order was issued here. See id.
11
Federal Rule of Civil Procedure 59(e), rather than Rule 54(b),
because only the former would have tolled the time for
appeal. The government’s supplemental brief goes further
and argues that, because the August 2011 entry of final
judgment approving the Settlement Agreement was treated as
a final judgment by the parties and this court on appeal, see
Cobell v. Salazar, 679 F.3d 909, 916 (D.C. Cir. 2012), the
plaintiffs can no longer bring an appeal from the district
court’s incentive award determination at all, notwithstanding
the pendency of their motion for reconsideration at the time
that judgment was entered.
Neither timeliness objection succeeds. An award of costs
and expenses at the end of litigation, like an award of
attorneys’ fees, is not reviewable on appeal until final in
district court. And as a general matter, “an order finding
liability for attorney’s fees” or litigation expenses “is not final
until the amount has been determined.” Gilda Marx, Inc. v.
Wildwood Exercise, Inc., 85 F.3d 675, 677 (D.C. Cir. 1996);
see also Father Flanagan’s Boys Home v. District of
Columbia Government, No. 02-7157, 2003 WL 1907987, at
*1 (D.C. Cir. April 17, 2003) (unpublished) (sua sponte
dismissing appeal from order imposing costs and fees
“[b]ecause the district court ha[d] not yet issued an order
determining the amount to be awarded”); Shields v.
Washington Bancorporation, 25 F.3d 1115, 1994 WL
266525, at *1 (D.C. Cir. June 2, 1994) (unpublished) (same
for attorneys’ “fees and expenses”).
That finality was plainly lacking here in July and August
2011 because the district court’s written order expressly stated
that the then-pending motion for reconsideration of the denial
of “Class Representatives’ Expense Application * * * will be
the subject of a further order.” J.A. 1790. That is about as
non-final as an initial ruling can get. And the formal entry of
12
judgment on August 4, 2011 said nothing about the
reconsideration motion, leaving it pending and unresolved.
The parties’ appeal of the final judgment approving the
Settlement Agreement could not by itself infuse a still-
pending issue with finality. The Supreme Court has enforced
a “bright-line rule * * * that a decision on the merits is a ‘final
decision’ for purposes of [28 U.S.C.] § 1291 whether or not
there remains for adjudication a request for attorney’s fees [or
expenses] attributable to the case.” Budinich v. Becton
Dickinson & Co., 486 U.S. 196, 202–203 (1988); Buchanan v.
Stanships, Inc., 485 U.S. 265, 268–269 (1988) (“[A] request
for costs raises issues wholly collateral to the judgment in the
main cause of action[.]”); see also Shultz v. Crowley, 802 F.2d
498, 505 (D.C. Cir. 1986). That rule holds whether the fees
and expenses sought are authorized by contract or by statute.
Ray Haluch Gravel Co. v. Central Pension Fund of the Int’l
Union of Operating Engineers & Participating Employers,
134 S. Ct. 773, 780 (2014); Lobatz v. U.S. West Cellular of
Cal., Inc., 222 F.3d 1142, 1144–1145 (9th Cir. 2000) (order
approving class settlement was final notwithstanding still
pending request for attorneys’ fees and costs). It was thus
entirely appropriate for the appeal of the settlement approval
to proceed while the award of costs and expenses awaited
final resolution. 6
6
To the extent that plaintiffs’ counsel’s arguments during the
appeal of the judgment approving the Settlement Agreement
suggested that the expense award was final (an issue on which we
do not opine), attorney arguments cannot create a finality that the
district court has withheld. The government, of course, is free to
make any judicial estoppel arguments it considers relevant in
district court. See, e.g., New Hampshire v. Maine, 532 U.S. 742,
749 (2001) (“[J]udicial estoppel[] ‘generally prevents a party from
prevailing in one phase of a case on an argument and then relying
13
Ripeness
At oral argument, plaintiffs’ counsel acknowledged that
all class members that can be located must be compensated
before an expense award could be paid out, suggesting the
possibility that there might not ultimately be sufficient funds
to pay the expense award even if plaintiffs prevailed on
appeal. See Oral Arg. Tr. 15:2–16:17. That raised the
question of whether the appeal was ripe for disposition since
the court would have been deciding the legal basis for a
payment that, on counsel’s telling, might never happen.
That would be a jurisdictional problem. “Put simply,
‘Article III courts should not make decisions unless they have
to.’” VanderKam v. VanderKam, 776 F.3d 883, 888 (D.C.
Cir. 2015) (quoting National Treasury Emps. Union v. United
States, 101 F.3d 1423, 1431 (D.C. Cir. 1996)). Ensuring that
issues presented are ripe for decision protects against the
“premature adjudication of ‘abstract disagreements’” and
“reserves judicial power for resolution of concrete and ‘fully
crystalized’ disputes.” VanderKam, 776 F.3d at 888. In
deciding whether a case is ripe, we consider “(1) ‘the fitness
of the issues for judicial decision’ and (2) ‘the hardship to the
parties of withholding court consideration.’” Id. (quoting
Abbott Laboratories v. Gardner, 387 U.S. 136, 149 (1967)).
The “fitness” prong “look[s] to see whether the issue is
purely legal, whether consideration of the issue would benefit
from a more concrete setting, and whether the agency’s action
is sufficiently final.” National Ass’n of Home Builders v.
United States Army Corps of Engineers, 440 F.3d 459, 463–
on a contradictory argument to prevail in another phase.’”) (quoting
Pegram v. Herdrich, 530 U.S. 211, 227 n.8 (2000)).
14
464 (D.C. Cir. 2006) (quoting Village of Bensenville v. FAA,
376 F.3d 1114, 1120 (D.C. Cir. 2004)). That test is satisfied
here. The issue of whether the Settlement and Fee
Agreements permit the reimbursement of third-party costs is a
question of contract interpretation and, to the extent
incorporated into the Claims Act, statutory construction.
Those are both legal questions that we review de novo. Segar
v. Mukasey, 508 F.3d 16, 22 (D.C. Cir. 2007) (contract
interpretation); United States v. Hite, 769 F.3d 1154, 1160
(D.C. Cir. 2014) (statutory interpretation). In addition, the
district court has conclusively denied the requested expense
award, and there is nothing in the ongoing fund-distribution
proceedings in district court that would affect the plaintiffs’
entitlement to the requested compensation or would otherwise
provide a more concrete setting for deciding the issue.
As to the hardship prong, the plaintiffs’ supplemental
briefing advised that $55 million has already been set aside
for expenses separate and apart from the still-undistributed
funds, Cobell Supp. Br. 9 n.8, so the availability of funds to
pay an expense award, were plaintiffs to prevail, no longer is
an issue, see also Gov’t Supp. Br. 6 (acknowledging that
“there should be funds available to make such an award”).
That means that, in resolving this appeal, we would not be
“spending our scarce resources on what amounts to shadow
boxing.” Alcoa Power Generating Inc. v. FERC, 643 F.3d
963, 967 (D.C. Cir. 2011). Moreover, if successful, the
plaintiffs would be able to seek an “immediate, concrete, and
valuable benefit.” Vanderkam, 776 F.3d at 889. In contrast,
delaying the claim indefinitely until every last plaintiff is paid
from an entirely separate pool of funds, especially after nearly
two decades of litigation already, would constitute a material
hardship. For those reasons, the plaintiffs’ challenge is ripe
for appellate review.
15
Finality
Even though the appeal was timely filed and the issues
raised are ripe, our jurisdiction is generally limited to
reviewing final judgments. See, e.g., Blue v. District of
Columbia Public Schools, 764 F.3d 11, 15 (D.C. Cir. 2014).
While the district court’s 2014 denial of reconsideration of the
decision not to award expenses conclusively resolved that
issue, the fight over attorneys’ fees and expenses has not
entirely wrapped up. Still pending before the district court are
(i) the claim of an attorney, Mark Kester Brown, to share in
the fee award already made to class counsel, and (ii) a request
from class counsel for post-settlement attorneys’ fees and
expenses. We conclude that neither of those issues deprives
the expense-award judgment of finality.
The issue of Attorney Brown’s individual entitlement to
recover attorneys’ fees based on the scope of his involvement
in the case is entirely independent of and has no bearing on
the decision whether to make an expense award to the
plaintiffs under a distinct provision of the Settlement
Agreement. See Samuels v. District of Columbia, 70 F.3d
638, 1995 WL 650158, at *1 (D.C. Cir. 1995) (unpublished)
(“A post-judgment order is generally not appealable as long
as any ‘closely related questions or proceedings remain
pending.’”) (emphasis added) (quoting 15B Wright & Miller,
Federal Practice & Procedure § 3916, at 356 (2d ed. 1992)).
Equally importantly, Brown’s claim does not seek to alter
the total amount awarded in attorney’s fees—he simply wants
a part of the existing pie. Resolution of his claim thus will not
affect the finality of the overall decision to award specific
amounts to the attorneys and Class Representatives. See
Boeing Co. v. Van Gemert, 444 U.S. 472, 481 n.7 (1980)
(company could appeal order requiring it to pay specified sum
16
to class even when order left undetermined what portion
would be paid to attorneys, as the company “had no
cognizable interest in further litigation between the class and
its lawyers over the amount of the fees ultimately awarded
from money belonging to the class”).
As to the still pending request for post-settlement fees
and expenses, that too is a separate and distinct legal matter.
The Settlement Agreement and Fee Agreement both break
pre- and post-settlement fees and costs out as two independent
matters. Settlement Agreement ¶¶ J(1), J(4); Fee Agreement
¶¶ 4, 5. And sensibly so. The pre-settlement fees and costs
pertain to a finite time and set of proceedings, all of which
have long-since concluded. Moreover, the order under review
conclusively resolves the last outstanding issue regarding the
amount of and entitlement to those pre-settlement fees and
expenses.
The post-settlement fees and costs, by contrast, could
continue indefinitely, for as long as the distribution of funds
and administration of the settlement continues. That process
has already taken years, with no end clearly in sight.
Importantly, there is no suggestion here that the fee and
expense awards made for pre-settlement work would be
revisited in resolving post-settlement fees. Furthermore, the
fact that we have already upheld the district court’s approval
of the Settlement Agreement, Cobell v. Salazar, 679 F.3d 909
(D.C. Cir. 2012), means that the prospect of the entire
judgment being reopened is (at best) speculative, and indeed
is something for which no party is asking. That is sufficient
to render the pre-settlement expense decision final. 7
7
See, e.g., Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 426 F.3d
694, 702–703 (3d Cir. 2005) (“[I]n a complex and ongoing action
such as this, § 1291 should not act as a bar to our exercise of
17
III
Analysis of Expense Award Decision
The Claims Resolution Act gave the district court
discretion to determine whether to award the Class
Representatives incentive payments and the amount of any
such payments “in accordance with controlling law[.]” Pub.
L. No. 111-291, § 101(g)(1)(A); see also Cobell, 679 F.3d at
922 (“[T]he class settlement agreement provided no guarantee
that the class representatives would receive incentive
payments; it left that decision and the amount of any such
payments to the discretion of the district court.”). We
accordingly review the district court’s denial of compensation
for expenses for an abuse of discretion. We similarly review
the district court’s denial of reconsideration, whether brought
under Rule 54(b) or Rule 59(e) of the Federal Rules of Civil
Procedure, for abuse of discretion. See Capitol Sprinkler
Inspection, Inc. v. Guest Services, Inc., 630 F.3d 217, 225
(D.C. Cir. 2011) (Rule 54(b)); Flynn v. Dick Corp., 481 F.3d
824, 829 (D.C. Cir. 2007) (Rule 59(e)).
jurisdiction over a fee award which resolves all fee claims for the
period leading up to a verdict.”); Gates v. Rowland, 39 F.3d 1439,
1450 (9th Cir. 1994) (entry of judgment as part of an ongoing and
periodic fee award process arising from monitoring a consent
decree was final because the decision conclusively resolved the
amount of fees that would be awarded for a discrete period of time
and activity under the consent decree); In re Nineteen Appeals
Arising Out of San Juan Dupont Plaza Hotel Fire Litig., 982 F.2d
603, 610 (1st Cir. 1992) (order regarding fees for one phase of
litigation was final because the award for that phase was “[i]n effect
* * * inviolate” in the next fee phase); cf. Pigford v. Veneman, 369
F.3d 545, 547 (D.C. Cir. 2004) (no appellate review where the
order challenged “does not finally dispose of a fee petition even for
a finite part of the post-judgment period”).
18
The plaintiffs’ motion for reconsideration argued both
that (i) the Class Representatives were personally liable for
much of the expenses they sought to recover, and (ii) even if
the expenses were not attributable to the Class
Representatives, the Settlement Agreement permits the
payment of costs and expenses of third parties wholly
independent of the costs and expenses of Class Counsel. J.A.
1838, 1841. On appeal, the only argument that plaintiffs
press concerning individual responsibility for expenses is lead
plaintiff Elouise Cobell’s asserted personal liability for
$390,000 in expenses. Otherwise, the plaintiffs devote most
of their appellate effort to challenging the district court’s
ruling that it lacked authority to make any award for expenses
incurred by third parties.
Cobell’s Personally Incurred Expenses
Elouise Cobell died on October 16, 2011, more than two
years before the district court denied her motion to reconsider
her individual claim for compensation of litigation expenses
and before a notice of appeal was filed on her behalf. While
the death of a party generally moots any claim for injunctive
relief, death usually does not moot a claim for monetary
compensation. See, e.g., Consolidated Rail Corp. v. Darrone,
465 U.S. 624, 630 (1984); Goodwin v. C.N.J., Inc., 436 F.3d
44, 48–49 (1st Cir. 2006); Harrow v. Prudential Ins. Co. of
America, 279 F.3d 244, 248–249 (3d Cir. 2002); Hall v.
UNUM Life Ins. Co. of Am., 300 F.3d 1197, 1207 n.5 (10th
Cir. 2002). But that is because the individual’s estate or
someone else legally eligible to recover the monetary claim
on the deceased’s behalf is substituted by counsel, as federal
rules specifically provide. See Fed. R. App. P. 43(a); Fed. R.
Civ. P. 25(a)(1); Goodwin, 436 F.3d at 47, 49 (claim for
damages “survive[d] [plaintiff’s] death and Article III’s ‘case
or controversy’ element” where “personal representative * * *
19
successfully moved for substitution as party plaintiff”);
Harrow, 279 F.3d at 247, 250 (same).
Inexplicably, counsel in this case never made any such
substitution either in the district court or at any time this
appeal was pending, until this court entered an order to show
cause why Cobell’s claim should not be dismissed as moot.
Counsel simply continued to press Cobell’s personal and
individualized claim for compensation for expenses she paid
to third parties as though her asserted injury could still be
redressed.
That incomprehensible delay in substitution could have
been fatal. Article III of the Constitution confines our
jurisdiction to deciding actual cases or controversies. See
Genesis Healthcare Corp. v. Symczk, 133 S. Ct. 1523, 1528
(2013). And one foundational and indispensable element of a
case or controversy is that a plaintiff have a “personal stake in
the outcome” at all stages of the litigation. Id. Until our
order to show cause, that prerequisite was conspicuously
lacking here for Cobell’s individual claim for compensation.
Cobell’s counsel responds only that the federal rules
setting up the procedure for substitutions in the event of a
party’s death do not impose a strict time limit for filing such a
motion. Pls.’ Show-Cause Resp. 4–6; see generally Fed. R.
Civ. P. 25(a)(1); Fed. R. App. P. 43(a). At most, that suggests
that counsel’s inexplicable delay did not violate the letter of
the Rules, although an expectation of ordinary diligence
presumably underlies each rule, and that certainly was
transgressed here.
The Rules, however, are no answer to the problem of
Article III mootness, which can be triggered by inordinate
delay in filing a motion for substitution. See Ortiz v. Dodge,
126 F.3d 545, 550–551 (3d Cir. 1997) (“Regardless of
20
whether [an] attorney has failed to comply with Rule 43(a),
we think it is quite clear that, at some point, the failure to
substitute a proper party for a deceased appellant moots the
case.”); Pisacane v. Desjardins, 115 F. App’x 446, 449 (1st
Cir. 2004) (dismissing appeal as moot where plaintiff’s
counsel failed to timely substitute under Rule 43); Coster v.
Watts, 390 F. App’x 168, 171 (3d Cir. 2010) (same, where
counsel had “numerous opportunities to find a substitute” but
failed to do so). Counsel in this case and in other cases going
forward would thus be well-advised to act diligently and
promptly in providing courts formal notice of the death of a
party—especially when the party is a class representative—
and making the legally required substitution. 8
Turning to the merits of Cobell’s claim, the plaintiffs’
argument that the district court failed to properly consider or
compensate any expenses personally incurred by Cobell is a
complete non-starter. The district court awarded Cobell a $2
million incentive payment—80% of the total amount of
incentive payments granted. When the question of expenses
was raised, the district court was explicit: The $2 million
“will incorporate her expenses as well,” and so those
personally incurred costs “will come out of her sizable
incentive award that I have already approved.” J.A. 1760,
1761. “She will not get additional monies for her expenses.”
J.A. 1760. The court repeated that determination in the
decision denying reconsideration. J.A. 1841.
Compensating Cobell in that manner was entirely
appropriate. The Settlement Agreement specifically provides
8
In a separate order, we grant the tardy motion for substitution
solely for purposes of litigating Cobell’s individual claim for
monetary compensation. We leave for the district court to consider
on remand whether any substitution for Cobell in her capacity as a
class representative is appropriate or necessary.
21
that the request for “incentive awards” shall “includ[e]
expenses and costs, of the Class Representatives.” Settlement
Agreement ¶ K.2. The district court’s approach also
comported with practice, as incentive awards have often been
used to compensate a class representative for incurring
expenses or taking on financial risk. See RMED Int’l, Inc. v.
Sloan’s Supermarkets, Inc., No. 94 CIV. 5587 (PKL), 2003
WL 21136726, at *2 (S.D.N.Y. May 15, 2003) (incentive
award took into account that class representative had
advanced most of the expenses incurred in the litigation). 9
Authority to Compensate for Third Party Expenses
The district court declined to address the plaintiffs’
argument that the Settlement and Fee Agreements authorized
an award of expenses even if they were incurred by third
parties. Treating the motion for reconsideration as filed under
Rule 59(e), the court reasoned that the argument was a new
one that “could have been raised before the Court ruled on the
incentive-award petition and, therefore, is not a proper subject
of the motion for reconsideration” under Rule 59(e). 29 F.
Supp. 3d at 25; id. at 22–23 (“The Court * * * will treat the
plaintiffs’ motion for reconsideration as a timely motion to
alter or amend the judgment pursuant to Rule 59(e),” and a
“Rule 59(e) motion * * * may not be used to raise arguments
or present evidence that could have been raised before the
entry of judgment.”) (citing GSS Grp. Ltd. v. National Port
Auth., 680 F.3d 805, 812 (D.C. Cir. 2012)).
9
See also Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482,
491 (E.D. Cal. 2010) (potential liability for defendants’ costs);
Razilov v. Nationwide Mut. Ins. Co., No. 01-CV-1466-BR, 2006
WL 3312024, at *3 (D. Or. Nov. 13, 2006) (potential liability for
counsel’s expenses); Allapattah Servs., Inc. v. Exxon Corp., 454 F.
Supp. 2d 1185, 1221 (S.D. Fla. 2006) (covering potential liability
for “financially ruinous” costs).
22
Denying consideration of the plaintiffs’ argument as
procedurally barred under Rule 59(e) was error. A motion
under Rule 59(e) is a motion “to alter or amend a judgment,”
Fed. R. Civ. P. 59(e), yet at the time the motion for
reconsideration was filed, no judgment had yet been entered,
nor had the district court’s oral ruling even been reduced to
writing. The decision was interlocutory and thus the
reconsideration motion should have been treated as filed
under Rule 54(b).
That mistaken characterization of the reconsideration
motion, moreover, was of legal consequence. Rule 59(e),
understandably, sets a high threshold for parties to raise a new
argument for the first time after judgment has already been
entered. See, e.g., Ciralsky v. CIA, 355 F.3d 661, 671 (D.C.
Cir. 2004) (Rule 59(e) motions need not be granted unless
“there is an intervening change of controlling law, the
availability of new evidence, or the need to correct a clear
error or prevent manifest injustice.”) (internal quotation marks
omitted); New York v. United States, 880 F. Supp. 37, 39
(D.D.C. 1995) (“Only if the moving party presents new facts
or a clear error of law which ‘compel’ a change in the court’s
ruling will the motion to reconsider be granted.”).
In contrast, Rule 54(b)’s approach to the interlocutory
presentation of new arguments as the case evolves can be
more flexible, reflecting the “inherent power of the rendering
district court to afford such relief from interlocutory
judgments as justice requires.” Greene v. Union Mutual Life
Ins. Co. of America, 764 F.2d 19, 22 (1st Cir. 1985) (Breyer,
J.) (ellipsis omitted) (quoting Dow Chem., USA v. Consumer
Prod. Safety Comm’n, 464 F. Supp. 904, 906 (W.D. La.
1979)); see Capitol Sprinkler Inspection, Inc. v. Guest Servs.,
Inc., 630 F.3d 217, 227 (D.C. Cir. 2011) (approving of
Greene’s “as justice requires” standard); Cobell v. Norton,
23
224 F.R.D. 266, 272 (D.D.C. 2004) (“[T]he standard for
reconsideration of interlocutory orders under Rule 54(b) is
distinct from the standard applicable to [Rule 59(e)] motions
for reconsideration[.] * * * [I]t is clear that courts have more
flexibility in applying Rule 54(b) than in determining whether
reconsideration is appropriate under Rule 59(e)[.]”) (internal
quotation marks omitted).
Accordingly, the district court’s application of Rule
59(e)’s strict prohibition on raising new arguments post-
judgment as a flat bar to considering plaintiffs’ argument was
unwarranted. See Saint Annes Dev. Co. v. Trabich, 443 F.
App’x 829, 832 (4th Cir. 2011) (unpublished) (error to treat a
motion for reconsideration under Rule 54(b) as a Rule 59(e)
motion); see also Fayetteville Investors v. Commercial
Builders, Inc., 936 F.2d 1462, 1469–1473 (4th Cir. 1991)
(error to treat motion for reconsideration of an order
dismissing a complaint as to just one of two defendants as
subject to the strict standards of Rule 60(b)); Greene, 764
F.2d at 22; Raytheon Constructors Inc. v. Asarco Inc., 368
F.3d 1214, 1216–1217 (10th Cir. 2003) (improper to apply
Rule 60(b) standards to motion for reconsideration filed after
the first stage in a bifurcated trial).
We need not decide whether that misstep by itself would
warrant reversal. That is because the district court was also
mistaken in concluding that the plaintiffs had not previously
argued that the Settlement Agreement permits an award of
third-party costs. The plaintiffs raised the point, albeit
without much elaboration at first, in both their initial petition
for an expense award and in the reply brief in support of their
petition. See J.A. 788, 1664.
That oversight may be understandable, given the
voluminous claims and arguments made over the course of
24
approving and implementing this massive and complex
Settlement Agreement. Unfortunately, the error leaves us
without guidance as to how the district court would have
interpreted the Settlement Agreement and, more importantly,
how it would exercise its broad discretion in compensating
expenses if they were found to be recoverable. We are
reluctant to interpret in the first instance a provision of the
Settlement Agreement on which the parties place such starkly
different readings, especially without knowing if the ruling
would have any practical consequence. The district court,
after all, might simply decline to exercise its discretion to
award costs even if they were deemed available. Cf.
Hamilton v. Geithner, 666 F.3d 1344, 1359 (D.C. Cir. 2012)
(“Although we review all questions of law de novo and have
the discretion to consider questions of law that were not
passed upon by the District Court, this court’s normal rule is
to avoid such consideration.”) (quoting Liberty Property Trust
v. Republic Properties Corp., 577 F.3d 335, 341 (D.C. Cir.
2009)); Bowie v. Maddox, 642 F.3d 1122, 1131 (D.C. Cir.
2011) (remanding where legal issue not passed on below
raised “several questions of first impression in this circuit that
would benefit from the trial court’s consideration”). Mindful
as we are of the length of time that has already elapsed in this
proceeding, we decline to resolve this legal issue without
providing the district court with an opportunity to consider the
interpretive and discretionary issues in the first instance.
IV
Conclusion
We hold that the appeal filed by the plaintiffs here is
timely and that the order appealed from is both final and ripe.
We affirm the district court’s denial of an additional award of
expenses to Cobell. Finally, we vacate and remand the
25
district court’s determination that the questions of whether
third-party expenses can and should be reimbursed were
procedurally barred. We remand for the district court to
consider that argument and, if warranted, to exercise its
discretion concerning such awards.
So ordered.