Cy Pres Funds

APPEAL DELAYS SECOND PAYMENT TO PREVAILING CLAIMANTS

On June 20, 2016, Keith Mandan filed an appeal of the District Court’s ruling granting modification of the settlement agreement. That ruling, described in detail below, provided for a payment of $18,500 to each prevailing claimant, along with $2,775 to the IRS on behalf of each claimant. However, under the terms of that modification, those payments cannot be made until the appeal is concluded and the District Court’s order affirmed. We hope that the appeal will be ruled on by June 2017. We regret that we cannot make any payments prior to resolution of the appeal.


Earlier Cy Pres Updates:

COURT APPROVES PLAN FOR DISTRIBUTION OF REMAINING FUNDS PREVAILING CLAIMANTS TO RECEIVE ADDITIONAL PAYMENT

The parties reached an agreement on changes to the existing settlement agreement. The revised proposal, which has now been approved by the Court, provides each prevailing claimant a supplemental payment of $18,500 directly and $2,775 paid to the IRS on their behalf, for a total supplemental award of $21,275, with the balance of the funds being directed to non-profit organizations.

After the supplemental awards to the prevailing claimants are paid, most of the remaining unclaimed funds would be placed in a Trust that could disburse the funds over a 20 year period, rather than immediately. Decisions on how to distribute the funds will be made by a board comprised of 14 Native American leaders, rather than by Class Counsel, as the original agreement provided. Recipients of grants from the settlement funds will be expanded from the original settlement agreement to include educational institutions and tribal-sponsored organizations. The Funds may be distributed to new non-profit organizations serving Native farmers and ranchers, not just to previously existing organizations. An initial distribution of $38 million will be distributed more quickly to the same types of organizations (but only those who provided services to Native American farmers and ranchers prior to November 1, 2010), based on recommendations from Class Counsel that are approved by the Court.

Organizations receiving funds are required to use the funds to provide business assistance, agricultural education, technical support, or advocacy services to Native American farmers and ranchers, including those seeking to become farmers or ranchers, to support and promote their continued engagement in agriculture.

A copy of the Court’s ruling is here. The Addendum to the Settlement Agreement that the Court approved is here.

Next steps:

Before we can make any payments, we have to wait to see if anyone files an appeal. The deadline to file an appeal is 60 days from the date of the Court’s ruling, which was April 20, 2016. If no appeal is filed, then the supplemental payments will be issued no later than 60 days after the time to appeal has expired. Thus, if there is no appeal, supplemental payments will be made to prevailing claimants in Summer 2016. If there is an appeal, then everything will be put on hold.

If you are a prevailing claimant, and have changed your address since the initial distribution, please let the Settlement Administrator know your updated address. Contact information is available here.

If you are a non-profit organization seeking to apply for funds from the initial $38 million distribution, we will post information as soon as possible.

REVISED PROPOSAL FOR CHANGES TO SETTLEMENT COMBINES TWO PRIOR PROPOSALS – DEADLINE TO COMMENT IS JANUARY 20, 2016

After the district court rejected both Mrs. Keepseagle’s proposal and the Plaintiff Class proposal for how to modify the settlement agreement cy pres provisions, both Mrs. Keepseagle, and Class Counsel and the Class Representatives engaged in extensive further discussions with counsel for USDA. The parties reached a new agreement on changes to propose to the existing settlement agreement. The revised proposal provides each prevailing claimant a supplemental payment of $18,500 directly and $2,775 paid to the IRS on their behalf, for a total supplemental award of $21,275, with the balance of the funds being directed to non-profit organizations.

The U.S. District Court recently ordered that it will accept written comments by mail from any Class member regarding the proposed modifications to the Keepseagle Settlement Agreement and the distribution of the leftover settlement funds. Class members include all of the following: successful claimants under Track A, successful claimants under Track B, and other Native American farmers or ranchers who applied for and were denied a loan from USDA from 1981 to 1999, whose claims in this case were denied for any reason or who did not file a claim.

Comments must be written and mailed to the Court with a postmark date no later than January 20, 2016. Comments should be addressed to:

Chambers of the Honorable Emmet G. Sullivan
U.S. District Court for the District of Columbia
333 Constitution Avenue N.W.
Washington, DC 20001

Additionally, there will be a hearing in-person before the Court on February 4, 2016 at 10:00 AM EST in Courtroom 24A at the United States District Court for the District of Columbia, located at the above address. At this hearing, after counsel for the parties present their arguments to the court, the Court will permit any Class member in attendance to speak regarding the revised pending proposal.

Additional notice regarding the comment period, and the current status of the case, has been sent by U.S. Mail to all claimants, and is available here, a brief description of the new proposal is set forth below.

The new proposal is a combination of the two prior proposals. First, each prevailing claimant would be paid $18,500 directly and $2,775 would be paid to the IRS on their behalf, for a total supplemental award of $21,275.

Next, remaining funds would be distributed to help Native American farmers and ranchers through grants to non-profit organizations, as the current agreement provides. But the Agreement would be changed in the following ways: (1) Most of the unclaimed funds would be placed in a Trust that could disburse the funds over a 20 year period, rather than immediately; (2) Decisions on how to distribute the funds would be made by a board comprised of 14 Native American leaders, rather than by Class Counsel; (3) Recipients of grants from the settlement funds would be expanded to include educational institutions and tribal-sponsored organizations; (4) The Funds could be distributed to new non-profit organizations serving Native farmers and ranchers, not just to previously existing organizations; and (5) $38 million, would be distributed more quickly to the same types of organizations, based on recommendations from Class Counsel that are approved by the Court.

Organizations receiving funds would be required to use the funds to provide business assistance, agricultural education, technical support, or advocacy services to Native American farmers and ranchers, including those seeking to become farmers or ranchers, to support and promote their continued engagement in agriculture.

THE DISTRICT JUDGE HAS REFUSED TO APPROVE ANY OF THE PROPOSED CHANGES TO THE SETTLEMENT

The U.S. District Court for the District of Columbia has issued its decision on the motions to modify the settlement agreement. You can read a copy here. The Court denied Mrs. Keepseagle’s motion to distribute additional funds to prevailing claimants or re-open the claims process. The Court ruled that there was no legal basis for the Court to order either change over the objection of USDA. The Court also denied Plaintiffs’ proposal to modify the cy pres provision to establish a Trust to supervise the distribution of funds to non-profit organizations, finding that all the class representatives, including Mrs. Keepseagle, would have to consent for any change to be approved.

There are three possibilities at this point. First, a party may appeal the district court’s rulings to the Court of Appeals for the D.C. Circuit. If anyone files an appeal, we expect it would be approximately a year before we receive a ruling from the D.C. Circuit. Second, the Justice Department, as counsel for USDA, and all plaintiff class representatives, could reach unanimous agreement on some alternative modifications to submit to the district judge. Third, the Settlement Agreement could be implemented as it currently stands and was approved by the district court in 2011, which would require Class Counsel to propose non-profit organizations to receive the cy pres funds, subject to approval by the Court. We do not yet know whether anyone will appeal, or whether any alternative modifications could be agreed upon.

When we have any further information, we will update this web page.

DEADLINE SET FOR COMMENTS REGARDING LEFTOVER SETTLEMENT FUNDS MAILED COMMENTS DUE JUNE 15, 2015 – IN-PERSON HEARING JUNE 29, 2015

The U.S. District Court recently ordered that it will accept written comments by mail from any Class member regarding the proposed modifications to the Keepseagle Settlement Agreement and the distribution of the leftover settlement funds. Class members include all of the following: successful claimants under Track A, successful claimants under Track B, and other Native American farmers or ranchers who applied for and were denied a loan from USDA from 1981 to 1999, whose claims in this case were denied for any reason or who did not file a claim.

Comments must be written and mailed to the Court with a postmark date no later than June 15, 2015. Comments should be addressed to:

Chambers of the Honorable Emmet G. Sullivan
U.S. District Court for the District of Columbia
333 Constitution Avenue N.W.
Washington, DC 20001

Additionally, there will be a hearing in-person before the Court on June 29, 2015 at 9:00 AM EST in Courtroom 24A at the United States District Court for the District of Columbia, located at the above address. At this hearing, after Class Counsel and the counsel for Mrs. Marilyn Keepseagle present their arguments to the court, the Court will permit any Class member in attendance to speak regarding the two pending motions/proposals.

Additional notice regarding the comment period, and the current status of the case, has been sent by U.S. Mail to all claimants, and is available here.

The pending proposal to modify the cy pres provision of the settlement agreement, and Mrs. Keepseagle’s request that, over USDA’s objections, the funds be directed instead to provide additional payments to prevailing claimants are described in greater detail below.

COURT HAS SET SCHEDULE FOR ADDRESSING MODIFICATION OF SETTLEMENT AGREEMENT CY PRES PROVISION

After resolving some preliminary motions, the District Court for the District of Columbia has now adopted a schedule to address the pending Motion to modify the cy pres provisions of the Settlement Agreement to establish a Trust, as well as to address the planned motion by Marilyn Keepseagle seeking to modify the Agreement to provide for another distribution of the remaining funds among prevailing claimants. The schedule is as follows:

May 19, 2015:

  • The Keepseagles shall file any motion regarding modification of, or relief from, the judgment in the case.

June 2, 2015:

  • The Keepseagles shall file any opposition to Class Counsel’s motion for modification.
  • The government and Class Counsel shall file any opposition to the Keepseagles’s motion for modification.
  • Any amicus curiae brief (brief by an outside third party) in support of or opposition to any pending motion for modification of the Settlement Agreement, for or against either proposal, shall be filed.

June 16, 2015:

  • The Keepseagles shall file their reply in further support of their motion for modification of the Settlement Agreement.
  • The government and Class Counsel shall file any reply in further support of Class Counsel’s motion for modification of the Settlement Agreement.

June 29, 2015:

  • The Court will hold a hearing on all pending motions for modification of the Settlement Agreement at 9:00 a.m. in Courtroom 24A, at the District Court for the District of Columbia, 333 Constitution Avenue N.W., Washington D.C. 20001.

A final decision in this matter may not be delivered until several weeks after the June 29th hearing.


Following completion of the claims process and payment of all successful claims pursuant to the Settlement Agreement, there is approximately $380 million remaining in the settlement fund (called the “cy pres funds”). Pursuant to the settlement agreement, those funds may only be given to non-profit organizations which provide services to current Native American farmers and ranchers and Native Americans seeking to become farmers and ranchers. While Plaintiffs sought agreement from USDA to modify the agreement to permit additional distributions to prevailing claimants, or further consideration for unsuccessful or late claimants, USDA would not agree to such a significant change to the agreement, and the settlement agreement cannot be changed without agreement from the government as well as the Plaintiffs. Therefore, Plaintiffs turned to modifying the mechanism for the cy pres distribution to make it more effective.

After a tentative agreement was reached with USDA in May, Class Counsel hosted a series of meetings and conference calls to receive input from class members and the community (see below in the Earlier Update section for the schedule of the meetings).

Plaintiffs’ counsel has filed a motion asking the Court to approve modification of the cy pres provision of the Settlement Agreement. The proposal provides for an initial distribution of $38 million to eligible non-profit organizations, and transfer of $342 million to a Trust created to administer the funds. The Trust would be required to distribute all funds within 20 years of the date it begins its operations. The Trust would make grants to not-for-profit organizations for projects that will serve Native American farmers and ranchers. Individuals familiar with the needs of Native Americans in agriculture will oversee the Trust and select recipients of the Trust funds.

A copy of Plaintiffs brief in support of the modification can be viewed here.

A copy of the proposed Addendum to the Settlement Agreement, referred to as Ex. A in the brief, can be viewed here.

A copy of the proposed Trust Agreement, referred to as Ex. B in the brief, can be viewed here.

Other exhibits referenced in the brief can be found here (Ex. C, D).

A report summarizing the input received from class members at the meetings mentioned above, or through mail and email messages, was submitted to the Court as well, and can be found here.

Plaintiffs’ counsel’s nomination for the Board of Trustees can be found here.

After Class Counsel’s motion to modify the Settlement Agreement was submitted in September, several non-parties filed motions to intervene in the case, which were denied. The court’s ruling can be read here.


On December 2, 2014, a Status Conference was held before Judge Sullivan. At this meeting, named plaintiff Marilyn Keepseagle was granted permission to address the Court in person, expressing her views in opposition of the proposed Trust, which she had previously made known in letters filed with the Court. Mrs. Keepseagle expressed, as Class Counsel reported to the Court last year, her preference to modify the settlement agreement to distribute the funds to the prevailing claimants. The Court interpreted this request as a motion for relief from judgment in this case, and suggested she retain counsel to submit a legal argument in favor of her position to the Court, so the Court could determine whether there was any legal support authorizing the Court to grant such relief.

The Court has decided to delay ruling on the pending motion regarding a possible Trust until Mrs. Keepseagle can retain counsel and present her own motion to modify the Settlement Agreement to distribute more funds to prevailing claimants. No deadline has been set, but we expect that in a couple of months, in early 2015, the Court will set a schedule for addressing Mrs. Keepseagle’s motion. There is no schedule set for how each motion to modify will proceed before the Court at this time. As additional information becomes available, we will continue to update this website.

It is likely that a future court hearing will be held in the District of Columbia to permit other class members to speak and be heard on this matter, so all views on how to manage the leftover funds have a full and fair opportunity to be heard. In the event that such a hearing takes place, information about it will be posted on this website.

A transcript of the December 2, 2014 hearing is available here.


Following completion of the claims process and payment of all successful claims pursuant to the Settlement Agreement, there is approximately $380 million remaining in the settlement fund (called the “cy pres funds”). Pursuant to the settlement agreement, those funds may only be given to non-profit organizations which provide services to current Native American farmers and ranchers and Native Americans seeking to become farmers and ranchers. The status report to the Court reporting on the parties agreement on how to proceed with this distribution is available here.

Because of the large amount of the remaining funds, the parties plan to make an initial distribution of $38 million to eligible non-profit organizations, and transfer $342 million to a Trust created to administer the funds. The Trust would be required to distribute all funds within 20 years of the date it begins its operations. The Trust would make grants to not-for-profit organizations for projects that will serve Native American farmers and ranchers. Individuals familiar with the needs of Native Americans in agriculture will oversee the Trust and select recipients of the Trust funds.

There are numerous details that remain to be worked out before a final proposal can be submitted to the Court in September for approval. The September submission will include the detailed rules of the Trust and what it can do with the funds, and nominate individuals to serve as Trustees.

Beginning July 30 and occurring regularly through August 26, 2014 a series of public sessions will be convened in various locations around Indian Country. The purpose of these sessions is to provide a venue and opportunity for Keepseagle claimants, tribal governments, interested individuals and nonprofit organizations serving Indian Country to provide input concerning the best uses of the cy pres funds, insight concerning needs in Indian Country agriculture, and thoughts about desired characteristics and experience in future Trustees.

Please hold the following dates and try to attend one of these sessions. You are welcome and encouraged to attend any one of these sessions. All in-person sessions will be held from 9:30-4:00 (with 1 hour break mid-day); all webinar sessions will be held at the times indicated below. If you are unable to attend a session either in person or by telephone, you can also submit your comments in writing by email to indianfarmclass@gmail.com.

These sessions are open to all interested individuals. Please see below for information regarding the in person meetings.

July 30, Tulsa, OK
Hard Rock Resort
777 West Cherokee Street
Catoosa, OK 74015

Aug. 5, Albuquerque, NM
Isleta Resort
11000 Broadway SE
Albuquerque, NM 87105

Aug. 7, Phoenix/Scottsdale, AZ
Talking Stick Resort
9800 E. Indian Bend Rd.
Scottsdale, AZ 85256
Aug. 12, Rapid City, SD
Best Western Ramkota Hotel
2111 N. LaCrosse Street
Rapid City, SD 57701

Aug. 14, Bismarck, ND
Best Western Ramkota Hotel
800 S. 3rd Street
Bismarck, ND 58504

Aug. 19, Spokane, WA
Northern Quest Resort
100 North Hayford Road
Airway Heights, WA 99001
Aug. 21, Billings, MT
Holiday Inn Grand Montana
5500 Midland Road
Billings, Montana 59101

Aug. 26, Raleigh, NC
McKimmon Conference
& Training Center
1101 Gorman Street
Raleigh, NC 27606

In addition the below sessions are available to participate in on-line or by telephone:

WEBINARS

We encourage you to use the toll-free number below to listen to the webinar and share your comments. To see the slides that we will present with our introduction, you can register for the webinar as described below, or, if you have any trouble with your registration, you can also download a copy of the slideshow here.

Aug. 6 2-5pm MT
To register for the webinar, please visit: https://attendee.gotowebinar.com/register/172771019936164610
Please register as soon as possible.
To participate via telephone only, please call: 866-901-2585 or 404-835-7099 at least 15 minutes before
the webinar is scheduled to begin (1:45p MT) and provide your information to the operator with the access code: 4057585.

Aug. 16 10am-1pm MT
To register, please visit: https://attendee.gotowebinar.com/register/4870689536306820866
Please register as soon as possible.
To participate via telephone only, please call: 866-901-2585 or 404-835-7099 at least 15 minutes before
the webinar is scheduled to begin (9:45a MT) and provide your information to the operator with the access code: 2575793.

Aug. 20 6-9pm MT
To register, please visit: https://attendee.gotowebinar.com/register/573117497260638466
Please register as soon as possible.
To participate via telephone only, please call: 866-901-2585 or 404-835-7099 at least 15 minutes before
the webinar is scheduled to begin (5:45p MT) and provide your information to the operator with the access code: 3181396.

You can download and share a copy of a flyer summarizing these meetings here.