['COBELL v. SALAZAR ']

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ELOUISE PEPION COBELL, et al.,
Plaintiffs,
v. Civil Action No. 96-01285 (TFH)
SALLY JEWELL, Secretary of the
Interior, et al.,
Defendants.
MEMORANDUM OPINION
Pending before the Court is Plaintiffs’ Motion for Reconsideration of Class
Representatives’ Expense Application [ECF No. 3839]. The motion seeks to have this Court
reconsider its June 20, 2011 decision declining to further diminish the common fund benefitting
class plaintiffs by granting the Class Representatives’ request to recover expenses related to
recoverable grants third-party organizations made to the Blackfeet Reservation Development
Fund (“BRDF”) to finance this lawsuit. Because the pending motion advances arguments and
evidence that could have been raised by the plaintiffs before the Court ruled and entered
judgment, the motion will be denied.
BACKGROUND AND PROCEDURAL POSTURE
On January 25, 2011, after reaching a congressionally-approved $3.4 billion settlement
with the United States, the plaintiffs in this case filed a petition requesting that the Court grant
the Class Representatives -- Elouise Cobell, Louise Larose, Thomas Maulson, and Peggy
Cleghorn -- incentive awards, expenses and costs. See Pls.’ Mem. In Supp. of Class
Representatives’ Pet. for Incentive Awards & Expenses [ECF No. 3679]. With respect to
expenses, the plaintiffs argued in the incentive-award petition that the Class Representatives
were entitled to reimbursements totaling $10,556,274.59 for litigation-support services provided
by the following third-party organizations: the Blackfeet Reservation Development Fund, 1 the
Indian Land Tenure Foundation, Charles River Associates International, Inc.,
PricewaterhouseCoopers, and RSH Consulting. Id. at 17. According to the plaintiffs, these
third-party organizations supported the litigation in various ways, such as contracting for expert
witnesses, coordinating travel, preparing statistical and financial analyses and models, and
lobbying Congress. Id. at 17-19.
Nowhere in the plaintiffs’ incentive-award petition or the accompanying exhibits was
there any indication that the Class Representatives personally guaranteed grants or loans made
by the third-party organizations for the purpose of funding the litigation of this case. To the
contrary, the reply brief supporting the plaintiffs’ incentive-award petition stated that litigation
expenses were paid by Elouise Cobell “and organizations to which Ms. Cobell is indebted, not
personally, but solely in her capacity as lead plaintiff in the prosecution of this case.” Pls.’ Reply
to Defs.’ Objections to Class Representatives’ Pet. for Incentive Awards & Expenses 17 [ECF
No. 3706] (emphasis added). Although the reply brief stated that the Blackfeet Reservation
Development fund was “heavily obligated to third party foundations,” the reply brief otherwise
1
The Blackfeet Reservation Development Fund was a nonprofit organization established
by class representative Elouise Cobell “to ensure adequate funding for the prosecution of this
case.” Pls.’ Mot. for Recons. of Class Representatives’ Expense Application 3 [ECF No. 3839].
At the time the settlement was reached, Cobell was the Fund’s director. Pls.’ Mem. In Supp. of
Class Representatives’ Pet. for Incentive Awards & Expenses 17.
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offered no hint that the Class Representatives were personally liable for such or similar
obligations. Id. at 22.
On June 20, 2011, the Court held a lengthy fairness hearing to consider whether the
settlement agreement proposed by the parties was fair, reasonable and adequate, and to rule on
the Class Representatives’ petition for incentive awards as well as other pending motions.
During the fairness hearing class counsel offered the following arguments in support of the Class
Representatives’ incentive-award petition:
[MR. HARPER:] A couple of issues related to incentive fee awards. First, Your
Honor, of course this court has broad authority to make an incentive fee award
that it deems fair and just under the circumstances.
We have sought incentive fee awards from $150 to $200,000 for three of the
named plaintiffs, and $2 million for Ms. Eloise Cobell.
All of these named plaintiffs have made important contributions to the success of
this case. A handful of individuals have objected to the incentive fee awards, and
most have targeted Ms. Cobell's -- the request made for Ms. Cobell.
Let's be clear, Your Honor. The request for Ms. Cobell is extraordinary. It is not
unprecedented, but it is extraordinary. The Alkatal case awarded, as Your Honor
is aware, $1.6 million to each of eight named plaintiffs. So this is not
unprecedented.
THE COURT: The one in Florida?
MR. HARPER: This is the one in Florida, Your Honor.
What I would submit to you today, Your Honor, is Ms. Cobell's contributions in
this matter have been far greater than the ones made in other matters. She has
devoted her life to righting this wrong. She has had day-to-day contact with
counsel. She's been involved in every important decision.
When this case needed a spokesperson, she was there. When this person -- this
case needed somebody to raise funds, she was there. When we needed somebody
to testify in Congress, she stood up. She took the brunt of the criticism for doing
so. When this case needed additional funds, she took $390,000 of her own money
that she had won in a McArthur Genius Foundation Award, and she utilized it for
experts in this case.
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Those are extraordinary contributions. Ms. Cobell has answered the call. This
case, this settlement is a testament to her strength, courage and perseverance. We
think that the request is extraordinary, but we also think that it is well worth it for
her contribution.
THE COURT: There was some challenge to her by Mr. Frank as to the $7 billion
offer that she testified to, et cetera.
MR. HARPER: Yes. With respect to the $7 billion offer, again, we presented this
in detail in our papers. There has never been a $7 billion offer for settlement of
this case. The $7 billion number came from the Bush administration, Your Honor.
It included the settlement of all tribal trust cases, the reform of the entirety of the
trust, the dealing with IT security issues, with fractionation, with not only
individual claims from the past but in the future, and the termination of the trust.
That is what the settlement offer was for $7 billion. It was considered widely a
poison pill. It is not being resolved here.
You take alone the tribal trust cases, which at one point the Attorney General,
Alberto Gonzales, testified in Congress that those were worth potentially up to
$200 million. I am not attesting one way or the other to it. That was his testimony.
And you say -- and that is included in the $7 billion offer. Obviously, that is not
the resolution of what was we are resolving here. That includes so much more,
and when you are talking about including future claims, then there is a grave
concern.
There is another aspect of that which is that Mr. Frank has posed that this
somehow makes Ms. Cobell have some kind of a conflict of interest.
Well, Your Honor, the answer to that -- and a similar objection is made regarding
attorney fees -- is that you get to decide, Your Honor, exercising discretion,
whether or not to make an award for an incentive award, and because of that there
is no conflict of interest. Otherwise there would always be a conflict of interest
whenever am incentive fee -- an incentive award was asked for and determined by
a court.
Pls.’ Mot. for Recons. of Class Representatives’ Expense Application Ex. 3, Hr’g Tr. 162:22-
165:22 (June 20, 2011) [ECF No. 3839-3] (hereinafter cited as “Pls.’ Mot. for Recons.”). This
quotation represents the entirety of class counsels’ arguments regarding the plaintiffs’ request
that the Class Representatives be awarded incentive fees and expenses. At the conclusion of the
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fairness hearing the Court granted in part the plaintiffs’ petition for incentive awards but denied
the request to award an additional $10,556,274.59 for expenses incurred by the third-party
organizations on the grounds that “[t]here [was] no class representative that [incurred] those out-
of-pocket expenses” and there was no authority to support a separate award for those expenses.
Id. at 243:4-11. The plaintiffs did not object to the Court’s determination that no Class
Representative personally incurred the $10,556,274.59 in litigation expenses attributed to third-
party organizations identified in the incentive-award petition.
One week after the fairness hearing, the plaintiffs’ filed the pending motion, which is
styled as a motion for reconsideration. Contrary to the typical motion for reconsideration, which
asks a court to take a second look at an issue that was previously raised and ruled upon, the
plaintiffs’ motion for reconsideration in this case interjected an entirely new argument that was
never presented to the Court, namely that the Class Representatives were personally liable for
$4,540,622.72 that the Blackfeet Reservation Development Fund owed to the Lannan
Foundation, an organization that was never mentioned in the incentive-award petition or during
the fairness hearing. Pls.’ Mot. for Recons. 1, 5. The plaintiffs claimed that the Class
Representatives were personally liable for the Blackfeet Reservation Development Fund’s
obligation to the Lannan Foundation because the Class Representatives executed assignments
that guaranteed the repayment of recoverable grants the Lannan Foundation made to the Fund.
Id. at 5. The plaintiffs also reasserted their request for the reimbursement of expenses that were
solely the Blackfeet Reservation Development Fund’s liability, but the plaintiffs modified the
amount sought from the original $10,556,274.59 to $3,144,732.91, which reflected $600,000.00
owed to the Otto Bremer Foundation – which also was never mentioned in the incentive-award
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petition or during the fairness hearing – $500,000.00 owed to the Lannan Foundation,
$1,210,598.00 owed to PricewaterhouseCoopers, $704,134.91 owed to Charles River Associates,
and $130,000.00 owed to RSH Consulting. Id. at 6. The plaintiffs did not request that the Court
reconsider its denial of expenses in the amount of $496,393.00 that the Blackfeet Reservation
Development Fund reportedly owed the Indian Land Tenure Foundation. And the only
explanation the plaintiffs proffered for the difference in expense amounts sought in the incentive-
award petition versus those sought in the motion for reconsideration was that the “plaintiffs, with
reluctance, seek reconsideration only of those amounts necessary to pay outstanding loans,
repayable grants and plaintiffs’ experts to which they remain in arrears.” Id. at 2 n.4.
On June 10, 2013, the plaintiffs filed a Notice of Supplemental Information and
Correction Regarding Plaintiffs’ Motion for Reconsideration of Class Representatives’ Expense
Application [ECF No. 3956] (the “Notice of Supplemental Information”), which served to
“correct the amount of expenses sought in the Motion to Reconsider to the amount of
$8,181,748.63 as a result of the $496,393.00 in funds loaned by [the Indian Land Tenure
Foundation] to Blackfeet Reservation Development Fund (“BRDF”) and used by plaintiffs to pay
expenses in the litigation.” Notice of Supplemental Info. 1. The Notice of Supplemental
Information also attached affidavits from Cris Stainbrook, the President of the Indian Land
Tenure Foundation, 2 and Charlotte Johnson, a trustee of the Otto Bremer Foundation, for the
purpose of explaining why loans and grants were made to the Blackfeet Reservation
Development Fund rather than to Elouise Cobell. Id. at 2.
2
Notice of Supplemental Info. Ex. 1, Stainbrook Decl. ¶ 1 (June 5, 2013) [ECF No. 3956-
1].
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LEGAL STANDARD
Although the plaintiffs filed their motion for reconsideration about a week after the Court
issued a ruling from the bench at the conclusion of the public fairness hearing and before the
Court issued judgment on August 4, 2011, almost two years later the plaintiffs filed the notice of
supplemental information, which amended the motion for reconsideration to add a new claim for
expenses relating to the Indian Land Tenure Foundation that was not raised in the original
motion. The Court nevertheless will treat the plaintiffs’ motion for reconsideration as a timely
motion to alter or amend the judgment pursuant to Rule 59(e) of the Federal Rules of Civil
Procedure.
It has long been the rule in this circuit that “[a] Rule 59(e) motion is discretionary and
need not be granted unless the district court finds that 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.” Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam)
(internal quotation marks omitted); accord Dyson v. District of Columbia, 710 F.3d 415, 420
(D.C. Cir. 2013). Accordingly, a Rule 59(e) motion is “aimed at reconsideration, not initial
consideration” and may not be used to raise arguments or present evidence that could have been
raised before the entry of judgment. GSS Grp. Ltd. v. Nat’l Port Auth., 680 F.3d 805, 812 (D.C.
Cir. 2012).
DISCUSSION
The entire premise of the plaintiffs’ motion for reconsideration is that the plaintiffs “may
not have been sufficiently clear that [Elouise] Cobell and, in certain cases, the other named
plaintiffs are personally liable for much of” the expenses the Class Representatives sought to
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recover in their incentive-award petition. Pls.’ Mot. for Recons. 1 (emphasis in original). There
are two flaws regarding this premise that doom the motion for reconsideration. First and
foremost, the plaintiffs were not simply “unclear;” to the contrary, they never raised this
argument before the Court issued its ruling, although they had the opportunity to do so both
during the briefing of the incentive-award petition and during the presentation of oral arguments
at the fairness hearing. 3 For this reason alone the Court will deny the motion. See GSS Grp.
Ltd., 680 F.3d at 812 (holding that new arguments raised in a motion for reconsideration were
waived because the plaintiff failed to raise them earlier during legal briefing).
Second, even if the Court were inclined to overlook the delinquency of the argument and
proceed to the merits of it, the argument would not survive reconsideration because it is
unsubstantiated. The plaintiffs asserted that each of the Class Representatives executed
assignments to the Blackfeet Reservation Development Fund according to which the Class
Representatives agreed to pay to the Fund all amounts they recovered from the United States
“related to attorney’s fees and/or costs and/or expenses of the Litigation.” Pls.’ Mot. for Recons.
5 (quoting Ex. 1, Rempel Aff. ¶ 4). As a result, the plaintiffs argue, the Class Representatives
are “personally liable and will be thrust into a precarious financial position” if the Court
continues to deny the requested reimbursement of expenses from the common fund. Id. To date,
though, the plaintiffs have failed to produce copies of the assignments to support their claim of
personal liability. At best, the only copy of an assignment submitted in this case that purportedly
3
At a minimum, the plaintiffs should have objected during the fairness hearing when the
Court determined that no Class Representative personally incurred the expenses at issue.
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was executed by the Class Representatives was filed by the United States as Exhibit 1 to its
opposition brief. 4 That assignment states:
This assignment is made between the Blackfeet Reservation Development Fund
(“Fund”) and Elouise Pepion Cobell, Earl Old Person, Thomas Maulson, and
James Louis Larose.
In consideration of payment by the Fund of certain fees and expenses incurred in
relation to Civil Action 96-01285 in the United States District Court for The
District of Columbia (“the Litigation”), an action in which each of the
undersigned is a plaintiff, each of the undersigned assigns to the Fund all rights to
any attorney’s fees and/or costs and/or expenses of the Litigation, recovered from
the United States, whether pursuant to judgment or to settlement, that the
undersigned recovers as a result of the Litigation.
Defs.’ Opp’n to Pls.’ Mot. for Recons. of Class Representatives’ Expense Application Ex. 1 at
P000478. The assignment submitted by the United States was signed by Elouise Cobell and a
former Class Representative named Earl Old Person, id., but no other Class Representatives, so it
is unclear whether it would even be enforceable against all Class Representatives, assuming it is
enforceable at all. If it is enforceable, by the plain terms of the assignment all rights to the $99
4
The Lannan Foundation -- which recently filed a separate lawsuit against Class Counsel
to enforce agreements promising that legal fees obtained in this case would be used to repay
grants the Foundation made to the Blackfeet Reservation Development Fund, see Lannan Found.
V. Gingold, No. 13-cv-01090 (TFH) -- has moved to intervene in this case and asserts that “the
four named representatives of the Plaintiff class (Ms. Cobell, Earl Old Person, Thomas Maulson,
and James Louis Larose) entered into a written agreement that assigned the BRDF all rights to
any attorney’s fees and/or costs and/or expenses of the Litigation . . . recovered from the United
States, whether pursuant to judgment or to settlement.” The Lannan Found.’s Mem. In Support
of Its Mot. to Intervene 3. That assignment has not been submitted to the Court in this case but
was attached as Exhibit B to the Complaint in Lannan Found. V. Gingold, No. 13-cv-01090
(TFH), and states that “[i]n consideration of payment by the Fund of certain fees and expenses
incurred in relation to Civil Action 96-01285 in the United States District Court for The District
of Columbia (‘the Litigation’), an action in which each of the undersigned is a plaintiff, each of
the undersigned assigns to the Fund all rights to any attorney’s fees and/or costs and/or expenses
of the Litigation, recovered from the United States, whether pursuant to judgment or to
settlement, that the undersigned recovers as a result of the Litigation.” The Court’s decision
herein should not be construed as suggesting any judgment about the merits of the Lannan
Foundation’s lawsuit.
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million attorneys’ fee award would be vested in the Blackfeet Reservation Development Fund so
any obligations the Fund had to other third-party organizations arguably would be satisfied from
that award. Although the plaintiffs never acknowledged whether the copy of the assignment
submitted by the United States accurately reflects the assignments cited in the plaintiffs’ motion
for reconsideration, the plaintiffs nonetheless concede that the Class Representatives “‘have
agreed to pay to the Blackfeet Reservation Development Fund all amounts that any or all of them
recover from the United States . . . related to attorney’s fees . . . .’” Pls.’ Mot. for Recons. 5
(quoting Ex. 1, Rempel Aff. ¶ 4). Consequently, the Class Representatives will not be thrust into
a “precarious financial position,” id., because any repayment obligation guaranteed by the Class
Representatives and incurred by the Blackfeet Reservation Development Fund could be satisfied
from the plaintiffs’ $99 million attorneys’ fee award rather than the remainder of the common
fund benefitting the class plaintiffs, the amount of which would be decreased by more than $10
million if the Court followed the approach advocated by the plaintiffs for reimbursing the
expenses of third-party organizations that supported the litigation.
At this juncture, the Court admits to some concern about whether the Class
Representatives might have been misled about the legal significance of the assignments,
assuming, again, that the assignments exist and state what the plaintiffs say they state. Based on
the plaintiffs’ own characterization of the assignments in their motion for reconsideration, it
appears to the Court that the $99 million attorneys’ fee award would be subject to the
assignments whereas the incentive awards would not because an incentive award is not “‘related
to attorney’s fees and/or costs and/or expenses of the Litigation,’” id. (quoting Ex. 1, Rempel
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Aff. ¶ 4). 5 To the contrary, an incentive award is “intended to compensate class representatives
for work done on behalf of the class, to make up for financial or reputational risk undertaken in
bringing the action, and, sometimes, to recognize their willingness to act as a private attorney
general.” Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958-59 (9th Cir. 2009). During the
fairness hearing this Court made no award of expenses or costs to the Class Representatives,
either individually or as members of the class. Indeed, with respect to Elouise Cobell’s personal
expenses, the Court stated that they were not addressed in the incentive-award petition so she
would have to rely on her incentive award for recompense. Pls.’ Mot. for Recons. Ex. 3, Hr’g
Tr. 243:4-15.
Finally, in their motion for reconsideration the plaintiffs argued that the Settlement
Agreement provided for the payment of costs and expenses “wholly independent of, and in
addition to, expenses and costs of Class Counsel.” Pls.’ Mot. for Recons. 4. The Court need not
take a position on the merits of this issue because it 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. That being said, the Court notes that this argument is irrelevant to the question
of whether the $99 million attorney’s fee award is subject to contracts that guarantee rights in the
award to the Blackfeet Reservation Development Fund or other third-party organizations.
5
The Court notes that if any dispute about the claimed assignments had arisen at the time
the Court was considering the incentive-award petition, the Court would have questioned
whether a conflict of interest existed between class counsel and the plaintiffs with respect to the
interpretation of the assignments as they relate to the $99 million attorney’s-fee award.
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CONCLUSION
For the reasons set forth in this Memorandum Opinion, the Court will deny Plaintiffs’
Motion for Reconsideration of Class Representatives’ Expense Application [ECF No. 3839]. An
appropriate order will accompany this Memorandum Opinion.
March 20, 2014 __________________________________
Thomas F. Hogan
Senior United States District Judge
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