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Judge Denies Cobell Class Representatives $8.2 Million

Senior D.C. District Court Judge Thomas Hogan denied $8.2 million in fees for class representatives involved in the Cobell class-action trust lawsuit.

Senior D.C. District Court Judge Thomas Hogan has denied $8.2 million in fees for class representatives involved in the Cobell class-action trust lawsuit.

Hogan’s ruling, issued March 20, rejected the Cobell class representatives’ second request since 2011 to receive incentive awards and reimbursements for litigation-support debts their lawyers say they incurred during the long-running lawsuit focused on federal mismanagement of tribal trust lands.

A $3.4 billion settlement to the case was approved by Hogan in August 2011, and class members are in the process of receiving payments as a result of that settlement; the tribe-focused land buy-back portion of the agreement, which accounts for $1.9 billion of the settlement, is ongoing as well.

The issues involved in Hogan’s latest ruling apply only to a select few class representatives involved in the case. In January 2011, lead plaintiff Elouise Cobell and other class representatives – Louise Larose, Thomas Maulson, and Peggy Cleghorn – petitioned the court for $10.5 million in combined incentive awards and cost reimbursements. Cobell, the lead class representative, passed away in October 2011; her family continues to monitor the case’s proceedings.

Hogan denied their petition in June 2011, and he upheld the denial in his most recent ruling, saying that the new motion advanced arguments and evidence that could have been raised by the plaintiffs before the court originally ruled and entered judgment on the matter. He indicated that the new arguments were flawed in a variety of ways, specifically referring at length to arguments made by Cobell lawyer Keith Harper during the previous hearing on the matter.

Hogan noted in his ruling that the motion to reconsider asked for $8.2 million, as opposed to the original $10.5 million, and he expressed concern that “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.’”

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The Cobell lawyers argued that class representatives personally owe the Lannan Foundation $4.5 million for its financial assistance during the case, and that the Blackfeet Reservation Development Fund, which Cobell directed, owes another $500,000 to the Lannan Foundation, as well as $600,000.00 to the Otto Bremer Foundation – “which also was never mentioned in the incentive-award petition or during the fairness hearing,” Hogan wrote – $1.2 million to Pricewaterhouse Coopers, $704,000 to Charles River Associates, and $130,000.00 to RSH Consulting.”

Hogan said the Cobell lawyers “offered no hint that the Class Representatives were personally liable for such or similar obligations” in their initial pleadings to the court, and he added that, due to legal assignments previously presented before the court of what was owed to whom, “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.”

Hogan added that “if any dispute about the claimed assignments had arisen at the time the Court was considering the incentive-award petition [in 2011], 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.”

The Cobell class counsel has not said whether it will appeal Hogan’s latest decision.

Several lawyers who have monitored the case say the ruling may cause a dilemma for the class counsel in terms of whether they should file an appeal. That is, if they choose to appeal, a large chunk of their own fees could be held up, yet if they choose not to file an appeal, whether they are serving the best interests of their clients could be called into question.

The Cobell lawyers have to date requested approximately $12 million in post-settlement fees in addition to the $99 million they have already been awarded. There is currently $14 million escrowed with the court that the Cobell lawyers, the Native American Rights Fund and lawyer Mark Brown are claiming. The court has not yet decided how the $14 million should be divvied.